How to get cheap car insurance
Grab 100+ insurance quotes & cashback
Car insurance premiums increased by an average of 34% in the year leading up to May 2024, as reported by Consumer Intelligence. However, prices have decreased slightly over the past three months, which may indicate that the trend of rising costs has stabilized. Therefore, before any potential future price hikes, now might be the perfect opportunity to secure the lowest possible rate – and this is often not accomplished by simply renewing with your current provider. Discover ways to reduce your car insurance expenses with our cost-saving methods and the Compare Car Insurance tool.
ExEconomics Compare Car Insurance tool
You could potentially save £100s by switching your car insurer. It’s always wise not to automatically renew your policy—instead, use multiple comparison websites to explore a wide range of insurers in just minutes.
ExEconomics Compare Car Insurance tool is designed to simplify the process of finding affordable car insurance online. Here’s what you can do:
- Complete just one questionnaire. We’ve integrated compare form, so if you’ve used it before, your answers can be auto-filled.
- Receive ExEconomics money-saving tips as you proceed. For example, our ‘best time to buy’ tool helps identify the optimal time to get the lowest quotes.
- View insurance quotes as a baseline. These come from best rate comparison, but our goal is for you to find even better deals.
- Utilize personalized suggestions to reduce costs further. These include tips on adding a second driver, exploring multicar policies, or adjusting your job title, with easy checks to see if these changes lower your premium.
- Discover if other websites may offer cheaper quotes. We’ll let you know if Direct Line (which isn’t listed on comparison sites) might be cheaper for you, and share our latest ranking of comparison sites to try.
If you prefer doing more of your own research when looking for quotes, you can still follow our proven steps below to find the cheapest car insurance, including which comparison sites to use.
What is car insurance?
Car insurance provides protection for other drivers and road users in case you cause damage to their vehicles or property. Additionally, depending on your coverage level, it can safeguard your car if it’s stolen, vandalized, or if you’re involved in a collision.
All vehicles are required to have insurance, unless they are not in use and kept off the road (such as being stored in a garage), with a statutory off road notification (Sorn).
There are three primary types of car insurance coverage, which we explain in more detail in our types of car insurance guide. Briefly, you can choose from:
- Third party car insurance. This is the basic level of coverage required by law and only provides protection for damage caused to others or their property.
- Third party, fire, and theft car insurance. Similar to third party coverage, but it also includes protection if your car is stolen or damaged by fire. For more information, check out our guide on Third party, fire, and theft car insurance.
- Comprehensive car insurance. This is the most extensive coverage available. It includes third party, fire, and theft protection, along with coverage for your car’s repair costs if you’re at fault in an accident, as well as any damage you cause to others or their property.
What’s the cheapest type of policy?
Determining the cost of car insurance isn’t simple, as your premium depends on how much of a risk insurers believe you present. The likelihood of you making a claim influences this, so, for instance, new and younger drivers generally face higher premiums compared to those with a long, accident-free driving history, as they’re seen as a higher risk.
The type of policy you choose also affects this. You might assume that third party coverage or third party, fire, and theft would be the cheapest since they offer less protection. However, car insurance doesn’t always follow logical patterns.
In some cases, insurers might view you as more responsible if you choose comprehensive coverage, leading them to categorize you as a lower risk. This can result in a more extensive policy at a lower cost. There’s no universal rule here—finding the best quote often requires some experimentation. So, don’t automatically opt for third party coverage if you’re searching for the cheapest option.
Additionally, consider how much voluntary excess you’re willing to cover if you need to make a claim. Generally, agreeing to a higher voluntary excess can lower your premium, but in the event of a claim, you could end up paying more than the amount you initially saved.
Other factors, such as holding a ‘Pass Plus’ certificate, can also impact your insurance costs.
For more detailed advice, check out our full guide, or explore our resources for young drivers aged 17-24 or those insuring multiple vehicles.
Cheap car insurance renewal tricks
Here are our top tips and tricks to find the cheapest cover.
1 – Never auto-renew, always compare quotes
NEVER auto renew. While insurers can’t charge current customers more than new ones, many can still save by switching.
Since January 1, 2022, regulations have prohibited car and home insurers from engaging in practices like ‘price-walking’ or the ‘loyalty premium.’
Previously, insurers would attract new customers with low rates and then hike renewal prices each year, regardless of any changes in circumstances, risk levels, or property.
However, this doesn’t guarantee that your renewal offer is the best deal. Prices vary among insurers, so it’s still wise to compare and see if switching could save you money.
Additionally, insurers may offer different rates through different channels, such as lower premiums on specific comparison websites (as long as existing customers who originally signed up through that site receive the same rates). Therefore, it’s essential to check multiple comparison sites.
2 – Quotes 20-27 days ahead are cheapest
The ideal time to obtain car insurance quotes is between 20 and 27 days before your policy needs to begin.
When you receive your renewal notice from your current insurer, it will display the upcoming year’s price as well as the amount you paid last year. This notice generally arrives about 28 days before your current policy expires. If you don’t act, your policy will likely renew automatically at the new rate. Therefore, it’s essential to mark your renewal date in your calendar to ensure you can review and compare quotes.
The best time to obtain quotes is 26 days before your renewal date, as prices tend to increase as the date approaches.
An analysis of over one million quotes from January to July 2024 revealed that on the renewal day itself, a policy averages £2,277 per year. However, 26 days earlier, the average cost drops to £906 per year—a significant saving of £1,371.
Typically, the closer you are to your renewal date when getting quotes, the more of a risk you appear to insurers (some suggest it may indicate a lack of organization). However, requesting quotes too early, such as 28 days or more before renewal, can also lead to higher prices, possibly due to fewer insurers offering quotes that far in advance.
3 – Add an extra driver to see if you can save
Explore potential savings by adding a responsible driver to your insurance policy.
When searching for insurance quotes, the process often involves trial and error rather than straightforward logic. Insurers respond differently, so it’s important to try multiple quotes to see what works best. Here’s a tip to consider…
Including an additional ‘responsible’ driver on your policy
Although it might seem counterintuitive, adding another driver to your insurance could actually lower your premium – sometimes by hundreds or even thousands of pounds. If you’re considered a high-risk driver and you include someone with a much lower risk profile as a secondary or tertiary driver, it can reduce the overall risk, potentially leading to a cheaper policy.
The key is to ensure the person you add could reasonably be expected to drive your car.
The safer the driving history and the lower the risk, the more significant the effect should be. Adding a person with a clean driving record is likely to yield the greatest savings, but anyone considered low-risk can contribute. Although insurance companies are legally prohibited from discriminating based on gender, factors such as age, experience, and driving history can still influence rates. For more details, check out information on named driver insurance.
Warning: Never add someone as the main driver if they’re not. This is known in the industry as ‘fronting’, and is fraud. If you do it and are caught, you could face a conviction and your insurance will likely be invalid.
4 – See if (legitimately) tweaking your job title can save you £100s
Choosing the right job title when securing insurance can sometimes lead to savings. For instance, an illustrator might be less expensive than an artist, an editor less costly than a journalist, and a PA more affordable than a secretary.
Experiment with our Car Insurance Job Picker tool to see if minor adjustments to your job title could lower your premiums. Just remember to be honest—misrepresenting your job could be considered fraud.
If you’re unemployed, you might face up to five times higher insurance costs compared to someone with a job. However, this increase doesn’t apply to homemakers (housewives or househusbands). If you fall into this category, indicate it to avoid extra charges.
But only use ‘homemaker’ if you are not actively seeking employment or receiving benefits that require job hunting. Misusing this term could be considered fraudulent.
5 – Before getting quotes, make sure you’re on the electoral roll – it can affect costs
Being listed on the electoral roll does more than just ensure you can vote—it can also impact your insurance rates.
Insurance companies like Aviva, Direct Line, Churchill, Privilege, Co-op, and Endsleigh have indicated that they rely on the electoral roll for verifying identity as a means to prevent fraud.
If you’re not on the electoral roll or have inaccurate details listed, insurers may find it harder to verify your identity. As a result, they might offer you a higher premium or refuse to provide coverage altogether.
Getting on the electoral roll is a simple process if you haven’t done so already. For more details, including instructions on how to register, check out our guide on the Electoral roll.
6 – If you’ve more than one car, check whether a multicar policy is cheaper
If your household includes multiple car, this information may be particularly relevant. Adding several cars to one policy can potentially reduce your costs significantly—saving you hundreds or even thousands of pounds in some instances. However, for others, this approach might actually lead to higher expenses.
To assist you, our comprehensive Multicar insurance guide provides insights on when to opt for a multicar policy, how these policies operate, and how to secure one, even if the vehicles have varying start dates.
7 – Check if one policy for both your car and home insurance works out cheaper
After evaluating the cost of individual coverage options, it’s a good idea to see if you could save money by bundling them.
Currently, Admiral Multicover* and LV Multi Cover* provide both home and car insurance in a single policy. This can simplify management, as you only have one set of paperwork to handle. However, this may not always be the most cost-effective choice, so it’s wise to compare it with separate policies to determine if you’ll save money.
Additionally, be aware that making a claim under a bundled policy may increase the premium for both home and car coverage when it’s time to renew.
It’s also beneficial to check with insurers that offer discounts to existing customers who take out additional policies. For instance, companies like Direct Line, Aviva, and Churchill provide discounts on car insurance if you already hold another policy with them.
What if my home and car policies have different renewal dates?
For Direct Line, Aviva, and Churchill, varying renewal dates are irrelevant since each vehicle and home will have its own distinct policy and number. The insurer will offer a discount for every policy you purchase, provided you inform them of your existing customer status.
In contrast, with Admiral and LV, the total amount you owe will reflect the different start dates. Your coverage with your current insurer will remain effective until its renewal, at which point you can cancel it and the Admiral (or LV) policy will commence. You will receive an ‘annual equivalent price’ that represents the cost as if all policies were active for a full year, allowing you to compare it with other providers.
8 – Pay annually for the cheapest policies
To secure the most affordable insurance policies, paying annually is typically required.
Opting for a monthly payment plan is essentially like taking out a high-interest loan, with APRs ranging from under 20% to over 40%.
For instance, if your premium is £1,000 and you choose to pay monthly, you might end up paying £95 per month, totaling £1,140 annually—an extra £140—at an average APR of 25%.
To avoid these additional costs, it’s best to pay the full amount upfront. If this isn’t feasible, consider using a credit card with a lower interest rate or, ideally, a 0% interest credit card for purchases, making sure to pay off the balance within a year.
If you use a credit card, verify whether the insurer charges a fee for this payment method. Even with a fee, it’s generally less costly than the interest on monthly payments.
9 – You can switch, even if not at renewal
A common misconception is that switching is reserved for renewal periods. In reality, you can change your policy at any time. This flexibility is particularly valuable when prices are increasing or if you recently auto-renewed without checking for potential savings. We have a comprehensive guide on how to cancel your car insurance, but to summarize…
- When canceling a policy partway through the year after paying upfront, you generally receive a pro-rata refund for the remaining months, provided no claims have been made. For those paying monthly, simply cease payments to the previous insurer and begin payments with the new one.
- Typically, there’s a cancellation fee of around £50 (check with your insurer for the exact amount). To make switching worthwhile, your savings should exceed this fee. The longer the duration remaining on your policy, the more advantageous switching may be.
- If you switch policies, you will forfeit the current year’s no-claims bonus. Therefore, it’s essential to ensure that you are achieving a significant saving to justify the switch.
If switching insurance providers mid-year is financially beneficial for you, start by notifying your current insurer of your intent to cancel. Inquire about any notice period requirements, as this will determine the effective date for your new policy. Once you’ve acquired the new policy, ensure that the coverage dates are consecutive—one policy should end on a specific day, and the new one should begin the following day. This way, you’ll avoid any gaps in coverage.
Get cheap car insurance quotes
Now that you understand the fundamentals of car insurance, here’s how to secure the most affordable rate:
Warning! Altering information between quotes might void your coverage. Minor adjustments, such as updating your mileage or job title, are usually acceptable. However, you should avoid misrepresenting yourself by claiming someone else as the primary driver, concealing driving points, or deliberately underestimating your annual mileage to lower your premium. Full honesty is crucial to keep your insurance valid and to avoid potential legal issues.
Step 1: Get quotes from comparison sites – two or more is best
Comparison websites function as insurance marketplaces since they have the ability to negotiate their own rates with insurers, provided these rates are not higher than those available through direct purchases.
This means that not only will various insurers be listed on different comparison platforms, but the same insurer might offer different prices across these sites. To ensure you get the most competitive quote, it’s advisable to use at least two comparison sites, or more if you have the time.
The following is our recommended order of sites to try. While the ranking is not significantly different, if any particular features stand out to you (as detailed below), feel free to prioritize those sites you find most appealing, as long as you use a couple.
How do we pick the order?
We evaluate the insurance quotes provided by Compare The Market, MoneySupermarket, and Confused.com by following these steps:
- We assess how frequently each comparison site offers the lowest price or a quote within £5 of the lowest price.
- The site that delivers the highest number of the lowest or near-lowest quotes is ranked highest.
- Next, we compare the top-ranked site with each of the other two sites. The combination that yields the most low-cost quotes will be prioritized first and second, aiming to maximize your chances of quickly finding a cheap quote.
Here are the latest scores
This month’s findings reveal that Compare The Market provides the lowest quote 53% of the time, outperforming the other two comparison websites. By obtaining quotes from both Compare The Market and MoneySupermarket, you can raise your likelihood of securing a lower quote to 87%.
For an even better chance at finding a low quote, request quotes from Compare The Market, MoneySupermarket, and Confused.com.
If you are over 25, have three or fewer penalty points on your driving licence, are accident-free, and your car is not a company vehicle (if you’re under 25, refer to our Young Drivers’ Insurance Guide), follow this sequence.
Keep in mind that comparison websites perform a soft search on your credit report to provide quotes, and this will not affect your future credit opportunities.
Try comparison sites in this order
| Site | Official perk info & ExEconomics analysis |
| Try as many as you can, in this order… | |
| Compare The Market* | Official perk info: Meerkat Movies and Meals. A year’s 2for1 on cinema tickets and meals on selected days of the week.
Perk analysis: For those who’d use it, and go to the flicks and restaurants, this perk can be worth £100s. However, instead you could grab other perks as you can use our trick to get Meerkat Movies and Meals for £1 for a year.
|
| MoneySupermarket* | Official perk info: SuperSaveClub and price promise.
SuperSaveClub: Buy annual car insurance and you can join this club, which gives you a 12-month Free Days Out pass. Plus, you’ll get a gift card of up to £15 for each subsequent qualifying product purchase you make through MoneySupermarket. Price promise: If you buy car insurance, then find a cheaper like-for-like policy with the same insurer (either direct or via another comparison site), MoneySupermarket refunds the difference plus a £20 gift card. Perk analysis: The Free Days Out pass gives you one adult entry to places across the UK, so used regularly it could be worth £100s. The £15 gift card on subsequent qualifying products is a bonus, as long as the quote’s competitive. You can use the price promise even if you’re not a member of the SuperSaveClub, though you’ll have to claim it. |
|
Confused.com* |
Official perk info: A Greggs hot drink per month and the choice of a… £20 Halfords voucher | £20 Sainsbury’s voucher | £20 Just Eat voucher | Access to Paramount+ for three months.
Perk analysis: The highest value is Paramount+, just, at £20.97. Add 12 hot drinks, and the value increases to about £40. |
| Then, to boost chances of finding a cheap quote further, try… | |
| Quotezone* – another comparison site, and you get access to Rewards+. It includes discounted tickets at selected Cineworld and Odeon Cinemas (links open PDFs). | |
| Gocompare – a big comparison site which currently gives £250 ‘free’ excess cover with every purchase. | |
| Direct Line – an insurer, rather than a comparison, but you won’t find its quotes on any comparisons, so it’s worth trying in case it’s cheaper for you. | |
Struggling to find (affordable) cover?
If you’ve experienced a series of claims or accidents, have a medical condition that impacts your driving, or hold four or more points on your driving license, obtaining an affordable quote from a comparison site might be challenging. You might even struggle to find coverage altogether.
If you’re not receiving quotes from many insurers on these platforms or if the premiums seem excessively high, think about seeking assistance from a broker. Search the British Insurance Brokers’ Association website to find someone who can help.
Step 2: Check cashback sites to see if you can get cashback
Compare cashback sites’ offers with your top quote to ensure you’re getting the best deal.
When using cashback sites, keep in mind that they earn a ‘lead fee’ for directing you to the insurer. After receiving this fee, cashback sites might either transfer the cashback directly to you or, in some cases, donate it to a charity.
Sometimes, using cashback sites can provide better deals than traditional comparison sites. However, it’s essential to verify that the quote from a cashback site isn’t higher than the comparison sites’ offers. Consider the cashback as a bonus rather than a certainty, as there are instances where deals may not be tracked or the cashback might not be paid.
For example, you can find versions of MoneySupermarket.com’s and Confused.com’s comparisons on cashback sites like Quidco* and Topcashback*, respectively. If you purchase a policy through these, you could earn £45, though this doesn’t include the standard perks from MoneySupermarket or Confused.
Always compare the quotes you receive by subtracting £45 from the lowest price offered by Quidco or Topcashback and see which option saves you the most.
For detailed information on how cashback sites operate, check out our Top cashback sites guide.
Currently, the record for the lowest annual car insurance premium achieved through a cashback site stands at 96p.
Step 3: Haggle with your existing insurer
After securing the lowest quote, consider negotiating a better discount with your current insurer.
Negotiation isn’t necessary if you’re considering switching to a new provider, but if you plan to stay with your existing insurer, it’s definitely worthwhile to reach out and negotiate.
Once you’ve completed the steps to find the most affordable option, contact your insurer by phone or through their online chat to inquire if they can offer a better rate or match the lower price you’ve found. Often, simply asking is sufficient, but if you’re having trouble, refer to our Car and Home Insurance Haggling Guide for effective strategies.
Step 4: Check your policy details carefully
After identifying the most affordable quotes, follow these steps:
- Verify the quotes by visiting the insurance provider’s official website. Comparison sites sometimes make assumptions to expedite the search process, so it’s important to read the quote carefully.
- Check if the insurance company is listed on the Financial Conduct Authority (FCA) register. Although insurers often state their FCA registration, it’s best to confirm this on the FCA’s official list.
- Ensure that the policy meets your requirements and assess if any additional features are necessary. Policies often come with optional extras, so confirm that your selected policy includes only those add-ons you want.
Common add-ons explained
| Courtesy car | If your car is essential for your daily life and you’d struggle without it while it’s being repaired, consider choosing a policy that includes a courtesy car as a standard feature or as an inexpensive add-on. Be sure to verify what type of vehicle you might receive, the duration for which you could use it, and whether a courtesy car is provided in the event that your car is stolen or deemed a total loss. |
| Breakdown cover | Many insurance companies offer this as an incentive to encourage purchases. However, be sure to review the policy details closely, as it typically provides only basic breakdown coverage (which often excludes home start and onward travel to your destination). You might be able to enhance the coverage, but verify if the cost of upgrading is more economical than purchasing separate car breakdown cover. |
| Protected no-claims discount | Typically, this allows you to make a claim without affecting your discount when you renew your policy with the same insurer. However, it’s important to remember that safeguarding your no-claims discount does not ensure that your premium will remain the same. |
| Legal costs cover | This assists in covering expenses or losses that you face due to a claim where you are not responsible. For instance, it can help with the deductible you must pay and may also cover loss of income or personal injury if you were in an accident caused by another driver. |
| Key cover | This service fulfills its promise by covering the expense of replacement keys if yours are lost or stolen. However, before proceeding, make sure to verify whether your car breakdown insurance already provides this coverage. |
How does car insurance pay out if I have a claim?
You will receive your payout once your claim has been completely processed. The time required for this depends on the specifics of your claim.
Simple claims are generally resolved within one to two weeks. However, more complex situations—such as unclear accident causes, extensive damage, or multiple parties involved—might take longer to settle.
The payout you receive is usually intended to cover repair costs and other damages, although the exact amount will be influenced by your coverage limits and any voluntary excess. Typically, this payment will be made as a lump sum to your bank account, after deducting any applicable deductibles. It’s advisable to review your policy carefully, as in some cases, the insurer might pay a repair shop directly instead. Additionally, you might receive a courtesy car while yours is being repaired.
If your vehicle is declared a total loss and you believe the insurer’s valuation is unfair, you can file a complaint with them. If the issue remains unresolved, you have the option to escalate it to the Financial Ombudsman Service, which offers free support.
For more information about the car insurance claims process, refer to our guide on Making a Claim on Your Car Insurance.
How to complain about your insurance provider
The insurance sector often struggles with a poor reputation for customer service. What works well for one person may be a nightmare for another.
Frequent issues include delays in claim payments, outright denials, or undervaluation of your vehicle following a total loss claim. Additional grievances can arise from unjust fees for changing your address, drivers, or vehicle, or from hidden exclusions buried in the fine print. While it’s generally a good idea to first reach out to your insurance provider directly, if that doesn’t resolve the issue, consider…
Using Resolver, a free tool designed to help manage your complaints. If your insurer remains uncooperative, Resolver can also assist in escalating the issue to the Financial Ombudsman Service at no cost.
Car insurance FAQs
Before getting a policy
Q – Will a policy cover me to drive other cars?
A – Car insurance generally protects you while driving your own insured vehicle. However, some comprehensive policies extend coverage to you (rather than just the named drivers) when you’re driving the cars of friends or family, provided you have their permission. It’s important to confirm with your insurer that this coverage extension is included in your policy.
You might also be covered to drive rental cars. If your comprehensive insurance allows driving other vehicles, it typically only offers third-party coverage for these cars—meaning it won’t cover theft or fire damage.
If you’re feeling generous, you can include additional drivers on your policy—known as named drivers—so they are covered when driving your car. Even if you’re not inclined to share, adding a responsible second driver can still help reduce your insurance costs.
Q – What’s the difference between a no-claims discount and a no-claims bonus?
A – There are two similar concepts in insurance known as no-claims discount and no-claims bonus.
Insurance companies prefer policyholders who are less likely to make claims and will offer incentives for maintaining a claim-free record. Typically, insurers provide a discount on your renewal premium for each year you remain claim-free.
The longer you avoid making a claim, the greater the discount you can receive at renewal. For example, you might get a 30-40% discount for being claim-free in the first year of your policy, and an additional 10% discount if you continue to be claim-free into the second year.
Q – Will I have a higher premium if I’ve modified my car?
A – Any alterations to your car, other than those related to security, can lead to increased insurance costs. It’s crucial to inform your insurer about any changes made to your vehicle, whether you initiated them or not, as failure to do so might invalidate your policy. Modifications include any additions or changes not part of the original vehicle specifications, such as optional extras like alloy wheels from the factory.
However, if you’re insuring a classic car, the situation is different. Insurers generally view modifications as a typical aspect of classic car ownership and do not impose higher premiums as a result.
Additionally, you can often lower your insurance premium further by enhancing your vehicle’s security. Installing an alarm or immobiliser, especially one recognized by Thatcham, can lead to significant savings.
Q – How do I insure a company car in my name?
A – Comparison websites typically assume that you own the vehicle you’re insuring. However, many individuals drive cars that are owned by their employers, even though they are responsible for insuring and taxing the vehicle themselves.
As a result, comparison sites, while helpful for checking prices, may not always be effective. It’s a good idea to consult a few specialists first and then compare their quotes with those from comparison sites.
Among insurers, LV* is one of the few that provides online quotes for company-owned vehicles. When you go through their quote process, you’ll be asked to specify who owns the car. While this doesn’t guarantee that LV will offer the lowest price, it can help you understand the general cost you should expect.
Q – What are my options if I only need temporary car insurance?
A – Whether you’re looking to insure your car just for a short period, borrowing a friend’s vehicle for a weekend, or renting a car to facilitate a move, temporary car insurance can be arranged for durations ranging from one day up to approximately 28 days, with some policies extending up to 60 days.
Typically, insurers offer coverage for drivers aged between 18 and 75. However, certain companies may exclude drivers under 21 and may be less willing to provide coverage to those with a high number of points on their driving license or a significant history of claims.
For more assistance, including a list of recommended insurers, check out our guide on temporary car insurance.
Q – Should I get telematics (aka black box) insurance?
A – It’s more than simply maintaining your hands at the 10 and 2 positions and shifting gears smoothly. Insurance companies will consider the following factors:
- The time of day or night you drive (11pm to 5am may cost more)
- Your speed (stick to the limit!)
- Gentle braking reactions (hard and sharp stopping is NOT good)
- Gentle acceleration and cornering (don’t treat your local roads like Silverstone)
Telematics companies may increase your charges if you drive too fast or take corners aggressively like Max Verstappen. Additionally, failing to drive responsibly means missing out on potential rewards. Given the high cost of insurance, any savings on your policy should be a strong motivator.
Although your insurer will keep a close eye on your driving habits, there are generally few limitations on where and when you can drive. Nonetheless, insurers will keep track of your driving and might raise your premiums based on your driving behavior.
How do insurers rate you on a telematics policy?
Telematics insurance adjusts your premiums based on your driving habits. A device installed in your vehicle tracks your driving behavior, meaning that the safer and more cautious you are on the road, the lower your cost for black box insurance.
Telematics policies go by many names, akin to a rap group’s numerous aliases. Whether you encounter terms like ‘black box insurance,’ ‘smart box,’ ‘pay-as-you-drive,’ or ‘usage-based insurance,’ they all refer to the same telematics-based policy.
Q – What effect does the excess have on my premium?
A – Be cautious when setting your voluntary excess. While choosing a higher excess often results in a reduced premium, it could leave you with significant costs if you need to file a claim.
The excess is the portion of the claim amount you cover. For example, if your excess is £250 and you incur £1,000 in damage, you’ll pay £250 and your insurer will cover the remaining £750.
Insurers frequently offer lower premiums in exchange for a higher voluntary excess, so consider this when comparing quotes. However, be prepared to cover this cost yourself if you need to make a claim, regardless of fault.
Q – How can I estimate my annual mileage correctly?
A – Insurance companies use your driving data to determine your premium. Generally, driving less can reduce your insurance costs. Therefore, while it’s crucial to provide an accurate estimate to avoid fraud, it’s equally important to avoid overestimating, as this could lead to higher premiums.
To ensure you provide a precise estimate, review your past driving history using reliable data. If your driving patterns have remained the same, use the same mileage figures. If they’ve changed, adjust the figures accordingly. The easiest way to track your mileage is by reviewing old MOT certificates or service records, where your mileage is noted. Comparing the mileage recorded from one year to the next can give you a clear picture of your driving history.
Q – Will an advanced driving course help me get cheaper car insurance?
A – Although not a certainty, enrolling in an advanced driving course might reduce your car insurance premium by as much as 15%, based on information from the comparison site Confused.com.
Courses like Pass Plus or the RoSPA Advanced Drivers and Riders scheme instruct drivers on handling various difficult driving conditions, such as adverse weather and nighttime driving. Consequently, many insurance companies regard those with such certifications as safer drivers and are inclined to offer reduced premiums.
It’s important to consider, however, that the expense of an advanced driving course could potentially surpass the savings on your insurance premium.
Managing your policy
Q – Do I need to notify my insurer of a change in circumstances?
A – If your circumstances change, it’s crucial to inform your insurer. Failing to do so could render your entire policy invalid, even if you later file a claim for an unrelated issue.
Inform your insurer of any changes, including something as simple as a change of address. This is essential to avoid complications during a claim. Securing insurance after a policy has been canceled can be challenging and costly.
Changes in circumstances, such as a job switch, can impact your risk profile, and insurers may need to be informed. Additionally, being in a stable relationship, such as cohabiting with a partner, might even lower your insurance costs compared to being listed as single.
Be mindful of any modifications to your vehicle. For instance, installing a tow bar for a caravan or trailer is considered a modification. It’s important to notify your insurer about such changes. Many car insurance policies do not include coverage for towing a trailer by default, so verify your policy details—some may require an increased premium.
For guidance on transferring car insurance, refer to the provided instructions.
Q – How do I make a change to my policy, and is there a fee?
A – This varies depending on your insurance provider. Many insurers, like Admiral, Axa, and Direct Line, allow you to make adjustments online. However, others, such as Age Co, Hastings Direct, and LV, might not offer this option.
Generally, making modifications to your policy, such as lowering your annual mileage, adding or removing a driver, or deleting optional coverage like key protection, incurs a fee.
The cost of these changes differs between insurers but typically ranges from £10 to £30. It’s usually cheaper to process changes online rather than by phone.
If you’re making a temporary adjustment (like a short-term mileage reduction), remember that reversing the change might incur another fee. Therefore, it’s wise to weigh the administrative costs against the potential savings.
Q – Do I need to tell my insurer if I have a crash but don’t claim?
A – If you’re involved in an accident that damages another person’s car and choose to handle the expenses on your own, you are still technically required to inform your insurance company.
Should your insurer later discover the accident, it could lead to increased premiums, as you may be classified as a higher risk.
Moreover, complications might arise if you have a subsequent accident that is linked to the initial incident. In such cases, while your insurance might not be canceled or you might not be accused of fraud, you could still face substantial costs, potentially amounting to thousands of pounds.
Q – I’m using my car much less than I used to, can I save on my existing policy?
A – Insurance revolves around risk assessment, so higher perceived risk generally leads to higher premiums. Therefore, driving more or including higher-risk drivers on your policy typically results in increased costs.
Reducing your estimated annual mileage can lead to lower premiums. However, making changes mid-policy often incurs an administrative fee ranging from £10 to £30, which you should consider when calculating potential savings.
For instance, in our review of over 80 quotes, reducing your annual mileage from 15,000 to 3,000 miles resulted in an average annual saving of £155. If you have just a month left on your policy, the saving drops to around £13. Conversely, cutting your mileage from 8,000 to 6,000 miles per year saved only about £24 annually, or roughly £2 per month.
Adjusting your mileage may involve some effort, so it’s worth doing if you have several months remaining on your policy. Otherwise, it might be more beneficial to shop around for a new policy, as changes in your situation might make another insurer more cost-effective and could reveal if you’ve been overpaying.
Q – How do I cancel my car insurance policy?
A – While some insurance companies allow online cancellations, most will require you to call them. If you cancel right before the renewal date, there typically won’t be any charges.
If you cancel an annual policy before its term is up, you might face an administrative fee of around £50. However, if you’ve paid the full premium upfront and haven’t made any claims, you should receive a partial refund. For those paying monthly, you’ll likely need to cancel your direct debit.
Keep in mind that if you switch insurers before your current policy ends, you won’t accumulate any no-claims bonus for the remaining period with your current provider. Therefore, it’s important to ensure that the savings from switching outweigh this loss. For more details on how to cancel your car insurance, check out our guide.
Q – Is the email I got about ExEconomics Compare and linking to partners legit or a scam?
A – We reached out via email to several individuals who experienced technical issues with the Compare tool last week. You can use the alternative link provided to access partners safely.