Car insurance slip-ups that could cost you money
- Common mistakes that could increase your costs
- Errors that might affect your chances of an insurance pay-out
- How you could invalidate your policy without even knowing it
Five car insurance mistakes you should avoid
Making modifications to your car can make insurance more expensive
1. ‘Misleading’ your car insurance company
Believe it or not, you can mislead your car insurance company – and potentially invalidate your cover – without intending to.
For example, if you modify your car (or buy a second hand car that has been modified) you must remember to tell your insurer. Modified cars are generally perceived as riskier to insure than other vehicles and may therefore require different or more expensive cover.
Other information you must remember to disclose includes previous convictions for driving offences, insurance claims you have made in the past five years and information about accidents you have been involved in during the past three years (even if they were not your fault).
Under the law it is your responsibility to tell your insurance company anything that may affect its decision to offer you cover, or influence how much you are charged.
Forgetting to tell your provider things that come to light later may mean you are refused a full insurance pay-out when you need it. Your policy could even be cancelled completely.
If you have an accident, you must tell your insurer - even if it was not your fault and you aren't putting in a claim
2. Under-insuring or over-insuring your car
If your car is new, worth a lot of money or an essential you couldn’t do without, it could be a false economy to buy third party, fire and theft (TPFT) cover instead of a fully comprehensive insurance policy. TPFT insurance offers you no protection in the event you have an accident that is your fault, so you could be left thousands of pounds out of pocket if you crash.
It’s also worth noting that, for some drivers, fully comprehensive cover may be no more expensive or could even be cheaper than a TPFT deal. It’s important to check whether this applies to you.
On the other hand, if a fully comprehensive policy for your car is very costly, consider whether you really need it. It may not be worth paying for if your car is very old, not worth much money or is rarely used.
3. Setting your car insurance excess too high
Increasing the voluntary excess on your insurance policy may help to make it cheaper – but beware of opting for an excess today that you could not afford tomorrow.
If you have to make an insurance claim, you’ll need to pay the excess before your provider will foot the remainder of the bill. Setting it too high could mean you are left in financial difficulty should an accident occur.
Car insurance for younger drivers can be expensive, but fronting is illegal
4. ‘Fronting’: insuring a younger driver in your name
If your son or daughter has just earned the right to bin their L-plates, no doubt the cost of buying them a car insurance policy will cut the family celebrations short.
Cover for young people can be incredibly expensive, so it isn’t surprising that older relatives or friends are sometimes tempted to ‘front’ on their behalf.
Fronting is the process of insuring a vehicle in the name of a more mature driver, even though the younger ‘named driver’ will actually be the main user of the car. It’s a form of insurance fraud and can have very serious consequences for everyone involved in the deception.
The insurance policy at stake may be cancelled, the mature driver may face a harsh fine or even a prison sentence and the young person could be banned from driving.
Consider the quality of the car insurance cover your policy offers, as well as how much it costs
5. Comparing insurance policies on price alone
When it comes to car insurance, it’s crucial to shop around. Most insurance companies offer their cheapest deals to new customers, so you could end up paying over the odds for your policy if you simply accept your renewal quote.
Comparison websites are useful for comparing deals, but be aware of their pitfalls. Which? investigated price comparison sites in 2010 and found the service they offer is far from perfect.
If you want to use comparison sites, try more than one and remember to think about the quality of the policies on offer as well as how much they cost.
Which? Recommended Providers for car insurance are reviewed on the basis of service as well as the quality of the cover they offer motorists – so it’s well worth checking out our findings before you sign on the dotted line.