Car Insurance Information
Car insurance is a massive costs of driving, in many
cases costing more than the expenses of MOT, servicing, repairs and road tax combined, especially for younger drivers or others who find it difficult to get a cheap quote, my first car was a Astra GTE the insurance cost more than the car to buy! This was 15 years ago mind but when looking at buying a car it needs to be one of the considerations of which car to buy.
For most people, only fuel itself costs more than insuring their vehicle, and with this much money at stake it's obviously a good idea to make sure you're getting the best deal possible on your policy.
The whole subject of motor insurance can seem mind boggling to you guys having to deal with it for the first time, but a with a little research and background reading you'll be in a position to make the most of the internet to drastically lower your premiums, and get a policy which gives you the cover you need at a price you can better afford.
Policies, buying online, tips and tricks and more, Search 2 drive has given you information and articles on both the general topic of car insurance and areas of more specific concern such as insurance for female drivers cheaper car insurance for women drivers
At one time, car insurance was pretty much a 'one size fits all' deal, where most people would be offered basically the same kinds of policies. Although safe drivers could be rewarded by building up a no claims discount, the premise of motor insurance was that the premiums of safer drivers who made less claims would subsidise the premiums of those who claimed more often.
This is palpably unfair on more careful drivers, and so several companies started to offer insurance targeted especially for less risky groups such as women.
Young drivers' insurance and fronting
Every young driver wants cheap car insurance, but to find it some motorists are willing to take shortcuts.
According to a comparison website, one in five drivers have or would consider ‘fronting' in order to save money on car insurance with one in three even believing that fronting is legal. So just what is fronting and how can young drivers save money on their premiums without breaking the law?
What is fronting?
Fronting is when a person buys and registers a car in their own name but the insurer is falsely told that someone else - usually an older, more experienced driver - is the main driver. Typically this practice is carried out by parents placing themselves as the main driver on an insurance policy with their teenage son/daughter appearing as a named driver - even though in reality, it is their child's car.
According to the Association of British Insurers, cases of fronting, and other aspects of insurance fraud have shot up by around 30 per cent since the recession took hold in 2007. It is estimated that the cost of undetected insurance claims now reaches £1.9billion a year - up 26 per cent from £1.6billion two years ago.
In addition to fronting, the Motor Insurance Bureau estimates that one in five young drivers are driving without insurance because their finances are so tight - despite the fact that car insurance is a legal necessity in the UK.
Why are young drivers resorting to fraud?
Young drivers face high car insurance premiums because they are deemed a higher risk to insurers. Statistics from road safety charity Brake, for example, suggest that one in five new drivers has a crash within six months of passing their test and that one in three drivers who dies on the UK's roads is aged under 25.
In the nine months to October 2009, the AA estimates that car insurance premiums increased by an average of 15 per cent and those hit the hardest were young drivers. Even downgrading their level of cover no longer guarantees a cheap deal - third party, fire and theft policies now average £1,059 a year.
However, resorting to fraud or even driving without insurance altogether is not the solution. Accidents involving uninsured drivers increase honest policyholders' premiums by an average of £40 a year according to the AA; while the penalties for being caught fronting are severe. If detected, insurers can refuse to pay out on a claim or can settle a third-party claim and recover the cost from the parent as the policyholder. If a claim is denied, the young driver is treated as though they are driving without insurance which could lead to heavy fines and six penalty points on their licence - that's an automatic ban for new drivers, with the prospect of higher insurance costs in the future.
So how can young drivers find cheap car insurance legally?
If you're new to driving then chances are that you will pay higher premiums than someone with more experience - but that doesn't mean that you can't save money.
There are several steps to finding cheap car insurance if you're a young driver including:
- Choose a car carefully: If you're yet to buy a car, look for a vehicle with a small engine, a standard specification and no modifications. Check to see which insurance group the car fits into - the lower the group, the lower the premiums.
- Get the right amount of cover: The more cover you have the better, but if you simply can't afford comprehensive cover then consider downgrading to third party fire and theft or third party only cover so at least you will be driving legally.
- Shop around: Use a comparison website to compare deals from more than 100 insurers and ensure you're getting a competitive quote.
- Buy online: Many insurers offer their cheapest deals online to new customers due to the savings they make on overheads.
- Look for young driver incentives: Several insurers design policies for young drivers with options such as rapid bonus schemes, allowing a young driver to earn a full year's no-claims discount in less than 12 months; and Pass Plus discounts, slashing as much as 35 per cent off premiums for new drivers that complete the Pass Plus course.
There are several additional ways to save, including:
- Increasing the security of the vehicle: With insurer-recommended car alarms, immobilisers and tracking devices.
- Parking in a garage overnight and in a secure car park during the day.
- Increasing the voluntary excess: This should only be set at a level you can comfortably afford.
- Paying premiums upfront: To cut out monthly interest charges.
- Agreeing to a mileage limit.
- Adding a named driver: Though adding a more experienced motorist as a main driver to front your policy is illegal, you can add an older driver as a ‘named driver' and you could even benefit from a discount.
Thanks to for the above information.
The Basics of Car Insurance
If you're new to car insurance it can seem like a complicated subject, but once you get past all the hype and marketing of the insurance companies, it's really quite simple. Motor insurance comes in three basic forms, which will be your starting point when deciding which policy to take out.
This is the simplest, cheapest form of insurance you can buy, and it's also required by law for every vehicle on the road. Basically, a policy of this kind means that if you cause an accident, then any damage caused to someone else's vehicle will be paid for and they won't be left out of pocket.
With third party insurance, damage to your own car will not be covered, nor will you be able to claim if your vehicle is stolen. Work out if you can afford to get a better ploicy as from experience you think that the cheapest will be ok as i did untill i had a crash and then you regret it.
Third Party, Fire And Theft
This kind of policy is one step up from simple third party. As well as covering damage you cause to another vehicle, your own car is covered against theft or damage caused by fire. This insurance isn't much more expensive than the most basic kind, and so most people choose it in preference as it gives better cover for little extra cost.
Comprehensive car insurance is quite a bit more expensive than third party, as it will also cover any damage to your own car in an accident that was your own fault. You'll also be covered for damage caused by someone else if that person's insurance can't be claimed on - for example, in a 'hit and run' accident.
Many comprehensive policies go even further, covering your in-car audio systems for example, or providing free windscreen replacement, roadside assistance, and even accomodation and transport if your car is put out of action. Naturally, these features will tend to bump up the price, so only include them on your policy if they're likely to be of use to you.
Chaps you aint going to like this but statistics show that women drivers are less likely to be involved in a serious accident, largely because they tend to drive more carefully and at lower speeds, and so are less likely to need to make a claim.
This means, in theory, that as a group their premiums can be kept lower as the insurance company doesn't need to pay as many expensive claims.
How To Lower Your Car Insurance Costs
Car insurance can be an expensive business, especially for young or new drivers, or those returning after a ban. There are however some simple ways to make sure you're only paying as much as you absolutely need to.
Get the right policy
Firstly, get the right kind of policy. If your car isn't worth a great deal, it's probably better to only insure for 3rd party, fire and theft. With a comprehensive policy, see if some options can be left off to reduce the premium - for example, you probably have no need for £500 worth of audio equipment cover if you only have a simple car radio system on the flip side though please inform your insurance company if you spend alot on your tunes.
If you fit a good car alarm system you'll probably be able to get your premiums reduced, and the same will be true if you park your car in a driveway or garage rather than at the side of the road.
No Claims Discount
Nearly all policies reward drivers who don't claim by giving them a discount for every trouble-free year. Make sure your policy has a high upper limit on bonuses, and you may be able to save up to 65% in time. Also see if you can find a 'rapid bonus' policy which builds up your discount more quickly in the early years of the policy, saving you money more quickly.
What is an excess?
An excess is a contributory amount you pay, when making a claim, however if the claim is deemed not to be your fault, it may be possible to recover your excess from the party deemed to be at fault.
Insurance policies feature something known as 'excess', where you are responsible for the first £xx worth of any claim. While it might seem desirable to have a low excess level, choosing a high one means you'll have to pay a slightly higher proportion of any claim value, but this will be offset by lower monthly premiums.
The more you drive in a year, the more expensive your insurance will be as the more miles you do the more you are on the road. While you probably can't do that much to reduce your mileage, you CAN make sure that the figures you supply to the insurance company are accurate, and you're not being charged for mileage you don't drive.
It's generally more expensive to insure a vehicle for any driver, than it is to have just one or two specific drivers named on your policy. If your car isn't likely to be used by anyone else (who may be covered under their own policy in any case), then lower your costs by restricting who the policy covers.
Compare Prices and Buy Online
Finally, and this may be obvious in this day and age, but buying your insurance online can save you a lot of money. The internet makes it easy to shop around and compare prices. If you simply renew your current policy, you're probably not getting the best deal you can.
A huge number of parents front insurance for their children by creating a situation where the parents insure the car and include their children as named drivers, whereas in reality the young drivers are the main drivers of the cars. This means that insurance companies have incorrectly assessed the real risks.
However, other than having to show insurance to the police in connection with any traffic offences, insurance is only of any use in the event of a claim. If the insurance company refuses to pay out as they suspect fronting, it is very difficult for a policyholder to prove otherwise and thousands of claims are being rejected saving the insurance companies millions.
In one recent claim the insurance company simply went to neighbours and asked them who drove the car the most. With a loud exhaust, music blaring and tinted windows - revenge is sweet. In this case the insurance company rejected the comprehensive claim, paid out the 3rd party liability and is now in the process of legal action to recover the amount paid to the 3rd party from the policyholder (a parent).
The policyholder, who may never have been in front of the court before, cannot really defend in the face of carefully amassed evidence. This can all be done through the County Courts to keep it out of the Press but it could easily escalate to the Criminal Courts, as this is insurance fraud. The insurance company will win judgement for the 3rd party liability and to recover this, it will simply seek a charging order on the parent's house or an attachment of earnings order.
In a survey, Young Marmalade found that over 45% of young drivers insured their cars through their parents. With insurance policies in some urban areas commanding market premiums well in excess of £4,000 for a young male, is it any wonder that parents will take a big risk to save money and hope their sons or daughters will not crash - but is this a risk too far?
Nigel Lacy - spokesman, Young Marmalade, a combined car purchase and low cost insurance scheme, specifically designed for young drivers.