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You are legally obligated to have an insurance policy covering yourself and any passengers in order to drive on public roads in the UK, so there's no getting out of paying your insurance premiums.
However, there are ways to save money on car insurance:
Types of Insurance
Looking at the basics, it's important to fully understand the differences between the three different types of cover.
Fully Comprehensive
The widest cover you can buy if you are involved in an accident or if your car is stolen. The key advantage of having it is that it covers the cost of repairing or replacing your car if it is involved in an accident whether or not it is your fault.
Third Party, Fire and Theft
Protects you from claims against you if you are involved in an accident and injure someone or their property, and also pays for damage to your car if it is damaged in a fire or stolen. It does not pay for damage to your car in an accident.
Third Party Only
The cheapest form of car insurance, it only protects you from claims against you if you are involved in an accident and injure someone, and will cover the cost of repairing or replacing the other person's car. It will not cover damage to your car but is probably adequate if you drive a car that's worth very little.
Purchasing Car Insurance
- Simply renewing your car insurance based upon your existing provider's quote is unlikely to get you the best deal, so you should shop around multiple comparison websites.
- Don't forget to check insurers who don't appear on comparison sites Aviva and Direct Line.
- Be conservative in your annual mileage estimate, lower mileage means cheaper insurance.
- If your quote is higher than you'd like, increase the voluntary excess. This means you'll get a smaller payout if you make a claim, but it will bring down the cost of your cover.
- Consider carefully which optional extras to include in your policy. If you want to pay as little as possible, remove extras like legal cover and loss of keys cover.
- You can also reduce your premiums by limiting who drives your car, parking in a garage, keeping your mileage low, or fitting an alarm or immobiliser.
Additional Drivers
Each policy has a main driver, called the policyholder, but some policies allow you to add multiple additional drivers, called ‘named drivers'.
- If you live in a household with more than one driver, or you share your car with family members, you can take out a single car insurance policy. The policyholder should be the primary user of the vehicle, and the other drivers can be ‘named'.
- Comprehensive insurance policies often include third party cover for anyone with a valid license to drive your vehicle with your permission, as an ‘unnamed driver'. The driver must be specifically named in the policy to receive comprehensive cover.
- Young drivers have a high level of risk, and so adding a young person to your policy is likely to increase premiums. On the other hand, adding an experienced older driver might even decrease your premiums.
- While the policyholder may receive a no claims discount when they are renewing their policy, a named driver will only earn this credit on some policies. An unnamed driver earns no discount at all.
- It's usually possible to add a ‘temporary driver' to your policy for a small extra fee by calling your insurance company and letting them know. For short periods of time, up to a few weeks, this is likely to be cheaper than adding them for the full year.
