How can I reduce my car insurance?

The cost of keeping a car on the road is rising, but one area where you don’t have to shell out to stay in the driving seat is car insurance. Unlike fuel prices where we have no control in the pricing scheme, shopping around for the best car insurance policy can save you a significant amount of money.

The key to getting the best value car insurance is finding the right policy, not searching for the cheapest price. A low premium might seem like a good deal initially, but you could face steep excesses or find you’re not covered sufficiently if you suffer an accident.

There are three types of car insurance available: fully comprehensive, third party and third party fire and theft. Here’s a brief explanation of what each type of cover includes:

Fully comprehensive

As expected by the name, this cover offers you the greatest financial and legal protection whilst driving. If you suffer an accident it will cover the cost of repairs to both your car and any vehicle you made contact with. Fully comprehensive insurance also includes protection in the event of theft, accidental damage, fire, malicious damage and some policies include third party insurance if you’re driving another person’s car.

Third party

This is the most basic cover, insuring you against damage caused to any vehicle you make contact with and any injuries caused to passengers you are carrying. It does not, however, cover your vehicle and therefore you will have to pay for any damage sustained to your car.

Third party fire and theft

This features the same level of cover as third party, however you are also insured if your car is stolen or set alight.

When it comes to choosing the type of insurance that best suits you, it’s best to go with the most coverage you can afford. Generally speaking, fully comprehensive insurance is recommended because it covers such a large number of eventualities and it doesn’t always work out more expensive than third party only insurance.

Third party/third party fire and theft policies are normally taken out by people with low value cars (less than £1,000) or in situations that mean fully comprehensive insurance policies are extremely expensive e.g. young drivers, people living in areas that are considered at high risk of theft/damage and those without a no claims bonus.

If you’re unsure which type of insurance you’d prefer, compare the costs for both – you could end up with a fully comprehensive policy that’s cheaper than being insured third party.

Make your premiums as low as possible

Once you’ve decided on a type of insurance, the next task is to make your premium as low as possible. Some factors you can’t change – your age, where you live, previous accidents – but there are other variables that can increase or reduce the cost of your policy.

For instance, if you have a garage but don’t currently use it, starting to park in the garage can give you cheaper car insurance because it’s a safer location than parking on the road. Adding extra security features such as an immobiliser or alarm can also benefit you financially in the long run.

If you’re considered a high risk driver, or you’re under the age of 25, adding another person such as a parent or spouse to your insurance policy – providing they are not considered high risk also – can lead to a cheaper premium.

Customising a car can cost you

Car proud people should be aware than modifying your vehicle can come at a cost. Unless it’s a security device, adding features such as alloy wheels or upgrading the mechanical elements of your vehicle will add pounds to your policy. Don’t be tempted to keep improvements quiet though; your insurance could be invalid if you fail to update the providing company about the status of your car.

Try not to rack up the mileage

Think carefully about whether you need to take the car for every journey you make. The more mileage you drive each year, the more you will pay for your insurance as the likelihood of having an accident increases when you’re spending a significant amount of time on the road. Make sure you clarify business mileage separately to personal mileage driven to avoid your insurance becoming void.

Get insurers to price match their policies

Don’t be afraid to ‘play’ more than one insurer off against each other to secure the lowest premium payment – if you’ve got a cheaper quote from a different insurance company to the one you’re currently using, give your existing firm a call to let them know. Many insurers will price match policies rather than losing customers.

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