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Cover type
The type of policy you choose affects the cost of your car
insurance because the higher the level of cover, the more
you will pay. Therefore all risks comprehensive car insurance
is more expensive than third party fire and theft cover. The
cover that produces the cheapest quotes will usually be basic
third party only cover, the minimum amount of cover available
that is required by law in the UK.
When working out the cost of your quote, car insurers will
also ask you for the following information and you will need
to provide this when completing the quote form:
• Type of car
Insurers class cars using a group rating system of 20 groups
which are based on the likelyhood of the car being stolen,
likely costs of repairs and parts, repair times, new car prices,
the availability of the basic frame of the car, and performance
in terms of the car’s top speed and acceleration capabilities.
The higher the rating, the more expensive the car is to insure.
• Your age & the age of other insureds
Your age can have a dramatic effect on the price you pay and
the quotes you are offered. Generally older drivers pay less
– although the price may rise if you are over 70. The
price will also take into account the ages of all the drivers
who are insured on the policy, not just the main driver. This
can be beneficial for young drivers if you have a named driver
who is older with a good driving record.
• Your job
Your job may also affect how much you pay. People deemed to
be in low-risk occupations, such as teachers and civil servants,
generally pay less than people in what insurers view as high-risk
occupations, such as actors, journalists and pub landlords.
However, car insurers are gradually realising that such wide
and indiscriminate classifications do not give an accurate
picture, for example, a journalist who works from home is
obviously less of a risk than a globe trotting paparazzo,
and are now beginning to produce car insurance quotes on a
more individual basis.
• Your gender
Generally young men are quoted higher premiums than young
women because they are considered to be a higher risk. This
is bourne out by statistics produced for the ABI by the Claims
underwriting exchange database (CLUE)
However, there tends to be very little or
no difference in the price paid for car insurance by older
men and women.
Younger women can save pounds with cheaper car insurance quotes
provided by specialist women driver insurance.
• Your claims record
If you have a bad claims record or you have been convicted
of motoring offences, you will pay more for your insurance
– although if a motoring offence is more than a certain
number of years old, your insurer may ignore it as spent.
If you have been convicted of drink-driving, you are likely
to face a price increase of possibly 100 per cent and you
may find that you cannot buy comprehensive car insurance at
all. You must always tell your car insurer about any convictions
and failure to disclose any material facts would render a
car insurance quote or policy invalid.
• Named drivers
T he more drivers who are insured on a policy, the more expensive
it will usually be. The most expensive option is an ‘any
driver’ policy under which anyone (with a valid driving
licence) who has your permission to drive your car is insured
to do so.
• Your Address
The price you pay will also be affected by where you live.
Insurance claims are more frequent in urban areas so motorists
in cities usually pay more than motorists in rural areas.
Insurers base this factor on your postcode. Every postcode
in the country is assigned a weighting so the price of your
car insurance quote could be seen to be directly determined
by your neighbours claims history! This may vary widely from
car insurance quote to car insurance quote depending upon
the car insurance provider.
• Where you car is kept overnight
You may pay less if you keep your car in a garage overnight
rather than parked in a drive or on the street. The price
may also be different if you usually keep your car somewhere
different from your home address.
• What you use your car for
Most private car insurance policies give you basic cover for
‘social, domestic and pleasure’ use, which usually
includes driving to and from your permanent place of work.
If you intend to use your car for business-related travel
(for example, to visit clients), your will need to inform
your car insurers. Your annual mileage will also affect the
cost of your insurance as obviously the more you are on the
road the more you are at risk and consequently prices quoted
for your car insurance will be higher.
• Giving lifts
All insurers have collectively agreed that if your passengers
contribute towards your running costs your insurance will
not be affected provided that:
you do not make a profit and that your car seats no more than
eight people.
This would cover examples such as a work friend contributing
to the cost of petrol in exchange for a lift to work, or your
sharing the school run with your neighbours
Step 3 - Car Insurance cover explained
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Services Authority for the arranging and selling of car insurance.
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