Money Wellness
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category iconMoney Saver
calendar icon04 Mar 2024

How to get value for money on your car insurance

Which? has found that 19 out of 27 car insurers were given two out of five stars when it came to value for money. They surveyed 2,793 customers who'd claimed within the last two years on their overall levels of satisfaction with their insurer and various aspects of their experience.

Here’s who ranked best:

NFU Mutual was awarded four stars out of five when it came to customers' views on its value for money. It had a customer score of 81% (reflecting its customers' overall satisfaction and likelihood to recommend it).

Seven other providers got three stars: AvivaAXA, Bank of Scotland, LV, Nationwide Building Society, Saga and Tesco Bank.

But there were 19 other car insurance providers that only got two stars.

Which? states that if you have to claim on your car insurance, the policy's value for money (or lack) will show itself, and they warn that a policy that misses an important part of cover could cost you more than your insurance.

Things your policy should cover:

When you’re shopping around for car insurance there are a number of things you should check your policy for that may indicate you’ll be paying out of pocket if you do have to claim.

Total loss courtesy car: Which? say that a comprehensive car insurance policy should pay out towards the cost of your car if it's stolen or written off. But if you don’t have access to another vehicle, you could end up shelling out for a hire one.

Check whether a policy offers a temporary car while yours is being replaced.

Legal cover: It is highly likely most policies will have legal cover. But there are distinctions in the cover between policies when it comes to the specific kind of claim you want to make. Many of the policies Which? reviewed were lacking for cover of illegal towing or clamping, or vehicle cloning- someone copying your licence plate. Be sure to check what cover you’d get in this scenario.

 No-claims discount: making a claim for vandalism means you'll lose some of your no-claims discount (NCD) depending on your policy. This is because your insurer had to pay out and wasn’t able to recoup it’s losses.

Personal belongings:  Most policies should have some personal belonging cover if an item is stolen or damaged, but Which? found that some policies came with gaps. Make sure to check whether your policy covers cash, credit cards and mobile phones and laptops.

Misfuelling cover: If you misfuel your car, check whether policies cover both the costs of draining your fuel tank and engine damage, as most only cover one or the other.

Premiums

Another reason your policy may be lacking in value for money is due to record high premiums (the amount you pay for your car insurance policy).

The cost of insuring an average car rose by 58% in the final quarter of 2023, increasing by £338 on average when compared with the same period as the year before, according to Confused.com’s insurance price index.

Last year’s rise in car insurance premiums is the highest annual increase since the index was launched in 2006.

When it comes to renewing your policy, here are some ways that might enable you to pay less:

Go fully comp

Some time back, insurers realised that millions of drivers kept their premiums low by opting for third party, fire and theft. But these motorists turned out to have more accidents than their counterparts who’d take out comprehensive cover.

Therefore, some insurers charge less for fully comprehensive cover than they do for third party, fire and theft.

Remove things you don’t need

It might also be worth reviewing add-ons to see if they’re increasing your quote. Things like courtesy cars, breakdown or car key cover can really inflate premiums.

Check your policy details to make sure you’re not overpaying for things you don’t need.

Make yourself low risk

Have a look at courses like Pass Plus, which is between £150 and £200, or take an advanced driving course. These can demonstrate you’re a low-risk driver and should lead to cheaper premiums.

Don’t guestimate your mileage

You’ll be asked for an estimate of your annual mileage. Don’t guestimate this as you could be miles out and you could end up paying more.

Log your mileage each time you renew your car insurance so you have a regular check point each year you can refer back to. Lots of insurers also have annual mileage calculators on their websites which are useful.

Premiums increase for anyone doing below 2,000 miles a year because they are viewed as higher risk because they aren’t getting enough experience on the road.

Around 5,000 miles a year appears to be the sweet spot for lower insurance prices.

Buy your insurance early

Moving the start date of your insurance by two weeks in advance of the renewal date can save you over £100.

If you do the quote to start the same day, the insurance companies know you’re desperate and will take advantage.

Find more tips on how to keep your premiums low.

Avatar of Lydia Bell-Jones

Lydia Bell-Jones

With a background in banking, Lydia has been writing professionally for over five years. She is passionate about helping people improve their personal finances and has a particular interest in the connection between money and mental health.

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