The 17 worst car insurance mistakes

by Cliff D'Arcy on 20 April 2011  |  9 comments
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Keep your premiums down by avoiding these 17 expensive errors!

Earlier this month, I spotted some alarming research from insurance broker Swinton.

In an online survey of 1,200 British drivers, Swinton found that more than a third (34%) hadn’t had an eye test for at least four years.

Here’s how long other drivers went without checking their eyesight:

* 26% had not visited an optician for between four and six years;

* 14% between six and eight years;

* 10% between eight and 10 years; and

* 6% over 10 years.

In total, 90% of motorists have gone four or more years without checking their vision. Yikes!

Get your eyes tested

As a result, Swinton warned motorists to ensure that they have regular vision check-ups. Not only will this make for safer, more aware drivers, but it also means that they’re not breaking the law.

The DVLA requires motorists to be able to read a number plate from 20 metres (66 feet), or 20.5 metres for old-style number plates. Drivers who have difficulty doing so -- either unaided or with the help of corrective lenses -- are breaking the law and could have their driving licences revoked.

What’s more, failing this sight test could invalidate your car insurance, which could prove extremely costly when you come to make a claim.

Don’t be a daft driver

Of course, not having a regular eye test isn’t the only mistake we can make when it comes to car insurance. So, to keep your premiums down and stay safe, don’t make these daft mistakes:

1. Not shopping around

During my 15 years in the insurance industry, I coined the phrase, “Loyalty is for dogs”.

That’s because insurance companies rely on ‘policyholder inertia’ (customer laziness). This enables them to rob existing customers so as to reward new customers. Stick with one insurer and you can expect yearly premium hikes until the day you die.

Hence, shopping around online for car insurance makes perfect sense. Instead of renewing with the same insurer, always gather new quotes each year.

2. Not demanding discounts

Always ask insurance companies for discounts. For example, you can get money off your premium for anti-theft devices (car alarms or immobilisers), advanced-driving classes, and, sometimes, covering two or more cars with the same insurer. Surprisingly, adding another ‘named driver’ to your policy could mean paying less, not more.

3. Not having a voluntary excess

As well as the normal policy excesses that apply when you make a claim, you can opt to pay a further voluntary excess of, say, £50 to £1,000. By doing so, you share the cost of future claims with your insurer, which rewards you with a lower premium. However, don’t choose a sky-high excess if you can’t afford to pay it when a claim comes along.

4. Not declaring previous convictions

Not telling your insurer about previous motoring, speeding (and criminal) offences and penalty points has serious consequences. Failing to reveal criminal or motoring convictions can be fraud, which could invalidate your insurance and lead to a criminal conviction.

So, always be honest: declare all driving offences committed in the past five years, plus any criminal convictions not spent under the Rehabilitation of Offenders Act. If you’ve broken the law, please confess this. Otherwise, your cover will be withdrawn as soon as your insurer finds out you’ve lied on your application.

5. Not mentioning previous accidents

It’s your responsibility to tell your insurer about any accidents you’ve been involved in, even if they weren’t your fault or you didn’t make a claim. If this information later comes to light, any claim will be rejected and your policy could be cancelled.

Generally speaking, insurers will want to know about your claims history for the past three to five years.

6. ‘Fronting’ a younger driver

‘Fronting’ is where a parent or other experienced driver claims to be the main user of a vehicle which is, in fact, being largely driven by a younger or less experienced motorist.

While fronting another driver may reduce his/her premium, both drivers are committing a serious offence. This deception can lead to policy cancellation, a criminal conviction, a driving ban, and a court fine or even imprisonment.

7. Not revealing modifications

If you modify your car with additions such as alloy wheels, a turbocharger or a special paint-job, you must tell your insurer. Premiums are higher for modified or souped-up cars, as insurers see them as riskier to cover, thanks to their higher cost of repair.

8. Not insuring for full value

Be sure to insure your car for its full value. If it’s worth, say, £10,000, then insure it for £10,000 and not a penny less. Under-insuring may lower your premium, but if your insurer finds out, it could cancel your policy or pay out much less than your car is worth when you claim.

Likewise, it makes no sense to over-insure a car, so check your vehicle’s market value before getting quotes.

9. Buying budget or cut-down cover

There’s not much point in buying a ‘minimalist’ policy if it doesn’t suit your needs. In other words, buying a budget or cut-down policy could be a false economy.

Equally, why buy TPFT (third-party, fire and theft) cover, when shopping around could uncover a fully comprehensive policy for just a few pounds more? Thus, before buying, get quotes for various coverage levels and always read the small print.

10. Not paying in one go

Always pay for your car insurance in one lump sum. If you choose to pay in monthly instalments, then expect to be charged interest rates of 30%+ APR. It’s much cheaper to spread the cost with a 0% on purchases credit card if you can't afford to pay for it all upfront.

11. Not protecting personal information

Don’t reveal too much personal data on social-networking sites such as Facebook and Twitter. Cunning criminals use these sites to find out when people are on holiday, before popping round to steal valuables, including cars.

12. Not completing paperwork carefully

Several crucial factors influence your insurance premium, such as your age, gender and occupation, your address and postcode, your car’s specification and where it’s kept. Be sure to get these and other details accurate on your insurance proposal.

13. Not improving your driving skills

The Institute of Advanced Motorists (IAM) teaches motorists to improve their standards of driving. By taking the IAM’s Advanced Driving Test, you can become a safer driver. After passing this test, many insurers will reduce your premium.

Related how-to guide

Slash your insurance costs

If you’re feeling the pinch, these ways of saving money on your insurance will help.

See the guide

For young or recently qualified drivers, a six-lesson course called Pass Plus helps to cut premiums to a manageable level. In some cases, passing can slash a third off a young driver’s premium.

14. Not driving with due care and attention

Get involved in a needless accident and you could lose something very valuable: your no-claims discount (NCD). Careful motorists with many accident-free years of driving can have NCDs worth 70% off their yearly premiums.

So, drive carefully and courteously, obey speed limits, keep your eyes open, and take a break if you’re tired or unwell. Driving defensively will help reduce the risk of unnecessary bumps, collisions and crashes.

15. Not using your garage

If you’ve got a garage, use it to store your car and not piles of old junk.

16. Not locking your car

Always lock your car when leaving it unattended, even if you’re only going to be gone for 15 seconds. Also, take your keys with you, because many unlocked cars are stolen from petrol-station forecourts every year. Imagine how foolish you’d feel if this happened to you...

17. Not maintaining your car

Neglecting your car can prove very expensive indeed, especially if poor car-care leads to an accident. If you’re involved in an accident or fatality, then you could face criminal charges for driving a vehicle in a dangerous condition.

Therefore, get your car serviced each year. Also, check your tyres, lights, engine oil and coolant levels on a regular basis. This advice from Auto Trader will help.

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