The right type of insurance
There are three levels of car cover:
- Third party
- Third party, fire and theft
Third party insurance covers other people, so if you injure someone or damage their property, they’re covered. But if your car is damaged or stolen, you have to pay for the loss yourself.
If your car is worth less than £1,000 and you can afford to buy another one if you have an accident, you don’t have a no claims bonus or you live in an area that is considered high-risk for crime, then a third policy may be right for you.
Even though third party policies offer less cover, they are not always the cheapest. So be sure to compare prices thoroughly with a site like loveMONEY.
Third party, fire and theft
Even though you have to fork out for most damages yourself, this type of car insurance policy does cover repairs or replacement if your car is stolen or damaged by fire. This option isn’t always the cheapest either, so it’s best to shop around.
This insurance will cover your own car, even if the accident was your fault.
You can claim for post-accident repairs, accidental damage or vandalism. You might also be able to legally drive other people’s cars if you have their permission. Always check your policy carefully. Policies vary, but you may be covered for personal belongings in the car, stereo, speakers and sat nav, windscreen damage, loss or theft of keys and vehicle recovery or accident transport.
Specialist car insurance
Some insurers specifically target policies at certain demographics, whether that's young people, new drivers or the over 50s. Be sure to check whether you'll be better off with one of these more tailored policies.
If you have an imported, modified, kit or sports car which you are struggling to get insured there are options for you, too. Have a look at Types of specialist car insurance for more.
If you only want short-term car insurance - even if only for a day - there are specialist policies available too. Check out our guide on One day and short-term car insurance.
Keep premiums low
If you’ve got a steep insurance policy, there are quite a few things you can do to trim the fat.
- Increase your voluntary excess as this shows your insurer that you’re willing to take more of the risk on board if you have an accident.
- Give as much detail as possible when setting up your insurance policy. For example, you can get lower premiums if you’re married as you’re seen as more responsible. And if you’re about to retire, tell your insurer. If you drive fewer miles or are ending a high-risk job, you might find your premiums falling.
- Make sure your annual mileage figure is as accurate as possible as it’s easy to overestimate. You can do this by keeping up with your mileage for a week, multiply the number by 52 and increasing it by 5% as a margin of error. Alternatively, some insurers offer an annual mileage calculator online.
Find out even more Ways to cut your car insurance.
Do you need the extras?
There are a few extras you may be entitled to depending on your policy. They will bump up your premiums though, so choose wisely.
Legal cover: This will cover you through your insurance if you’re involved in a legal suit. Always find out how much your policy will cover.
Breakdown cover: If you want to pay a little extra, you may want to add breakdown cover which will cover you should your car decide to pop its clogs unexpectedly.
Driving in Europe: If you’re a keen Euro traveller, you’re covered if you want to avoid taxis and public transport. You may have to pay extra if you want full cover.
Personal accident cover: Depending on the policy, this will cover you and your partner if you suffer a serious injury while travelling in or getting out of your car. It will usually cover the loss of a limb, fractures, death or loss of sight in one or both eyes. Some insurers will only offer a minimal payout though, so it’s always best to check your policy to see what is covered and for how much.
No claims discount protection: This will make your policy a bit more expensive, but it could be worth it if you’ve built up a few years without claiming and you want to protect your bonus. With this, you’re usually allowed to make one claim in one year or two claims in three years without losing your no claims discount.
Courtesy car: Some insurers will give you a courtesy car if yours is involved in an accident. Most comprehensive policies will offer this service at no extra cost.
Always compare prices on comparison sites like loveMONEY, as well as those insurers who only offer policies direct like Direct Line.