Five car insurance secrets

Car insurance can be pretty confusing. Discover five things you might not know about your policy.

With new car number plates released in September, many of us might be in the market for a new or second-hand car at the moment.

Many of those buying a new car may also be looking to take out a new insurance policy. If you’re shopping around for a policy, it makes sense to become acquainted with all the loopholes and technicalities or you might not be covered when you need to claim.

Here are five facts you might not know about your policy.

1. Being too trusting can cost you dear

Your insurance company may not pay out if you fall prey to a fraudster when selling your car.

This deception clause covers any number of fairly common scams. For instance, the insurer might not cough up if a buyer pays for the vehicle with a cheque that bounces or tricks you into parting with your car during a test drive.

Also, you may not be protected if you purchase a stolen vehicle that is subsequently returned to its legal owner.

2. You may not have comprehensive cover abroad

A comprehensive insurance policy provides the most extensive cover if you’re driving in the UK. Once you leave British roads and head to the Continent, however, you may find your protection plummets.

For instance, some insurers only offer third party cover abroad even if you have a comprehensive policy in the UK. Other companies only pay out if you have provided advance warning you’ll be driving in another country.

Before you head off on holiday, it would be wise to check your policy’s fine print. If you visit the Continent frequently, you might also want to consider adding European cover as an extra feature.

3. Your job could push up your premiums

If you’re filling in a car insurance application, you’ll almost certainly be asked for details of your profession. How you answer this question could have a significant impact on the cost of your premiums.

If your job involves an element of driving you could pay more for car insurance. Statistically, the more time you spend on the roads, the more likely you are to be involved in a collision. Even midwives who drive to home births could face higher premiums.

4. Your premiums can still go up if you protect your no claims

With no claims discounts (NCD) offering significant reductions on premiums, the idea of protecting your NCD may well be appealing. However, this doesn’t necessarily prevent your premiums from increasing if you have an accident.

Insurance companies may still take the accident into account as part of your driving record when calculating your premiums – although you will still qualify for the discount, the underlying premiums will be higher.

5. Paying monthly could be more expensive

Some insurance companies hike their premiums for customers who pay in monthly instalments.

To keep costs down, it might be worth paying in one lump sum. If your finances won’t stretch to the full amount, you could try paying with a credit card that has 0% purchasing power.

With the Tesco Clubcard Credit Card, for instance, you won’t pay any interest on purchases for a market-leading 16 months.

**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**

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