A quarter of drivers unclear about their car coverNew study uncovers car insurance confusion

03 October 2015

car key sitting on top of insurance form

One in four drivers do not know what type of car insurance they have, research by the Chartered Institute of Insurers (CII) has revealed.

The CII, which polled 2,000 UK motorists, also found that more than a third of drivers believed that comprehensive cover would pay for the damage if they had an accident driving another car.

Comprehensive car insurance usually offers third party coverage for motorists using other vehicles, only paying for the damage to other drivers and their cars.

Meanwhile, 35% thought that if a sneeze caused a crash their insurance wouldn’t cover it, 29% believed UK car insurance is not valid in the EU and one in ten thought an excess is a type of premium insurance policy.

However, sneezing behind the wheel will not invalidate a claim, UK car insurance includes the statutory required cover to drive in the EU and an excess, far from being high-quality cover, is the amount the policyholder has to pay in the event of a claim.

Find out more: Which Recommended Providers – best and worst car insurance

Buying car insurance: Finding the right cover at the right price

Car insurance may be a confusing grudge purchase but it doesn’t need to leave you out of pocket. Follow our tips to cut the cost of cover.

Set the right excess

If you're willing to pay more for your excess your insurer will lower your premiums. However, make sure you select your excess carefully. Setting the bar too high, especially if it's too close to your claims limit, might make claiming on it pointless and expensive.

Choose your occupation carefully

The job categories used by insurers to help set your premiums can be broad, meaning that many drivers could fit into many different segments. For example, if you're unemployed but are a housewife or househusband, putting yourself down as a homemaker instead can help you save money.

However, remember that you should never lie about your job. Don’t say you are a butcher if you are a baker. This is considered fraud and you could be prosecuted.

Pay annually (if you can afford to)

Paying for cover on a monthly basis involves taking out a loan, usually at high interest, from your provider. The APR can vary but it can be as high as 40%. Some insurers will also charge you a fee for setting up a monthly payment plan.

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