In theory it’s easy to choose a car insurer based on a combination of cost and the usual policy features.
In reality, there are a host of factors which can affect the suitability of a policy for your needs and its eventual overall cost which aren't always reflected in a quote comparison or even a quick scan of the insurers website.
Here are six questions to ask potential motor insurers which can reveal less obvious differences that could impact your satisfaction as a new policyholder.
1. What's the policy on repairs?
Different insurers have different rules for what happens to your vehicle after a crash. Some will let you use any reputable repair centre and then send in the bill (though this isn't a guarantee your claim will be settled in full.) Others will let you choose your own repairer but require you to get a quote and have it authorized before you go ahead with the repairs. Others will insist you choose from a list of approved garages.
2. What is your schedule for no claims discounts?
No claims discounts can make a serious difference to the amount you pay: eventually your overall premium could be halved or reduced even further. But this isn't an issue where you can simply compare two figures: you'll need to take into account how much the discount is for each extra year without claims, and at what point the discount "bottoms out" and you can't earn any further discounts.
Check also to see what happens if you make a claim: many insurers will, as long as it's only a one-off claim and you then go at least a year without another claim, allow you to keep some or all of your discounts rather than have to start from scratch.
3. Is there a maximum no claims discount you can transfer?
Most insurers will allow you to carry over your no claims record from another insurer and offer the appropriate discount - after all, if they didn't you'd have less incentive to move. But some insurers impose a limit on the number of NCD years you can accumulate which can be as little as five years. So you could be worse off if you transferred your NCD of seven years with one insurer to another that only allows five years. In effect you’ve just lost two years of NCD which could have saved you money if you moved to another insurer with a higher NCD maximum the following year.
4. How does the payment method affect the premium costs?
In some cases, paying by cash or debit card can earn you a discount (or avoid a surcharge, depending on how you look at it.) On the other hand, some insurers allow you to pay in installments over the year, but charge a higher premium for doing so. Be sure to calculate how much this premium works out as in terms of interest and consider whether borrowing the money through an overdraft or paying on a credit card might actually work out cheaper.
5. Are there any admin charges for policy amendments or cancellation?
There can be a host of potential admin charges for specific policy events such as amendments and cancellation. Whilst your actual premiums might be the lowest around, if you have to pay hefty admin charges for simply changing your address it could prove less than competitive. Therefore scour the policy booklet for admin charges or give your shortlist of insurers a call for confirmation before buying. You can read more about policy charges in the article How to uncover hidden costs of car insurance before buying.
6. What other discounts are available?
Some of the factors that may earn you a discount include completing the Pass Plus scheme of advanced driving lessons for newly qualified drivers; fitting an alarm system from an approved manufacturer; taking out both motor and home insurance with the same provider; and agreeing to stick to keeping below a certain mileage, an option that's good for occasional drivers or light use vehicles. But which insurers offer which discounts -- and by what percentage -- can vary immensely.
PLEASE NOTE: The guidance published in this article is for information only and does not constitute financial advice or a recommendation of any particular car insurance product or company. If you are in any doubt please consult an independent insurance adviser. A database of advisers in your area is available at www.unbiased.co.uk
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