RAC Cars News


Detangling The Insurance Minefield

By raccars Published

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Some supposed facts about car insurance that are commonly held to be true may be confusing Britain's car owners. When it comes to insuring your car, check the following details to sort fact from fiction.

Fully comprehensive is more expensive than third party cover

Not necessarily. This used to be the general rule, leading budget conscious car owners, particularly young drivers, to take the risk of only contracting third party insurance in order to save money. Insurance companies, having wised up to this practice, raised third party premiums accordingly. Get quotes for both third party and fully comprehensive cover before you buy.

Red cars cost more to insure

A complete myth. The colour of your car has absolutely no effect upon the cost of your insurance premium.

Fully comprehensive cover allows you to drive any other car

Yes - and no. Many comprehensive car insurance policies will cover you for driving other cars, but this is strictly with the owner's permission and is third party only, meaning any damage to the car you are driving will not be covered. Check your small print very carefully to see if this applies to your policy.

Excess is due only if you are at fault

While this is true in theory, it applies only if your insurer is able to reclaim their expenses from the other party. If the other side does not pay out for some reason, you will be obliged to cover your excess.

Not at fault accidents do not affect your premium

Unfortunately, insurers consider you a riskier bet if you have an accident in any circumstances and will adjust your future premiums accordingly. Even if you have a protected no claims bonus, the basic policy to which the discount applies can still increase.

Insurers will cover outstanding finance in the event of a write off

If an insurance company deems your car a write off after an accident, it will pay you what it considers to be fair market value at that time. What, if anything, you owe on any finance arrangements has no bearing on the determined value of the car. If you have a high interest finance arrangement, it may be worth taking out a 'gap' insurance policy, to cover shortfalls of this kind.

Cheaper is better

The cheapest quote may be the most convenient, but it does not necessarily cover what you need from your car insurance. For example, you may be foregoing free windscreen replacement for your cheaper premium, or be subject to a much higher excess. Cheaper doesn't always mean better value.

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