News & blog - Car Insurance

  In the UK, every model of car has an Insurance Group Rating that helps insurance companies to calculate premiums. The groups are set by the Group Rating Panel, (made up of members from the Association of British Insurers and Lloyds Market Association) which meets every month. However, their ratings are purely advisory – insurance providers are free to consider their recommendations and still use their own ratings if they wish. At the moment, there are 20 different car Insurance Groups, so cars are rated between 1 and 20. A car that is in group 1 (such as a Fiat Panda or a Vauxhall Corsa) is considered one of lowest risks to insure and would attract the lowest premiums. Cars in the highest groups are those which are considered likely to cost insurance providers the most in claims. A high performance car (such as a Porsche 911) in group 20, would be in the highest premium band. Most family cars fall somewhere between group 6 and group 12. How are the group ratings calculated for each model of car? The major factors considered are the cost of spare parts and repairs – because that’s where more than half of insurance claim money is spent. But there are other factors: The cost of damage and parts – this is the most obvious factor; the lower the costs, the lower the group rating is likely to be. Repair times – longer repair times are more expensive and lead to a higher group rating. Foreign cars (i.e. those manufactured outside the UK) or more ‘exotic’ models therefore tend to have a higher rating. Different paint finishes can also contribute to a car’s placement in a higher group. New car values – the prices of new cars can be a useful indicator to replacement costs. A luxury model in the £25,000 price bracket is more likely to reside in a higher group than a family car costing less than £10,000 new. Body shells – the availability of the body shell (or basic frame) of the car is important because it is essential in many accidental damage repairs. Again foreign cars or non-standard cars are in the higher groups. Performance – the higher the performance and speed of the car, the more risk there is of theft or accident, which leads to a higher group rating. Car security – security features can reduce insurance claims, so standard fitted security features can lead to a lower group rating. The kind of features that can make a difference are high security door locks, glass etching, alarm systems and immobilisers, locking devices for wheels and visible Vehicle Identification Numbers. If you want to keep the cost of your car insurance premium down, choose a car with a low group rating. You can ask a dealer which models belong to which groups; consult car magazines, or do a search on the Association of British Insurers. Choosing a car from one of the lower rated groups may mean that your running costs are less too. Call Us Now Chat Live Now Clients

Third Party The minimum level of cover you need to legally be able to drive on the roads is called ‘Third Party’. It used to be the cheapest type of insurance but now bizarrely fully comprehensive policies can often be cheaper. Never assume one costs less than the other; quote both. Third Party covers you for any damage you cause to another person’s vehicle and protection for any passengers in your car. Therefore, if you are in an accident and it is your fault, you will have to pay for any repairs to your own car yourself, as your insurance won’t cover it. It’s more expensive because it’s assumed you care less about your car and are therefore more likely to have an accident. It’s generally the most suitable for those… With cars worth less than £1000 Aged under 25 Without a no-claims bonus Or living in a high risk area Third Party Fire and Theft Third party fire and theft has the same level of cover as third party insurance. However, self evidently, it also has the additional cover of assistance if your car is stolen or is set on fire. Fully Comprehensive This is the widest level of cover but can be the cheapest. The big advantage is if you have an accident and it was your fault you will be able to claim the cost of repairing your own car as well as those of the other drivers. The cover also includes accidental damage and vandalism, for example if somebody causes damage to your car when it is parked in the street and they then drive off. Plus you’ll be able to drive hire cars or other people’s cars if you have their permission, although this will probably only be Third Party. Fully Comp is a good idea if your car is worth more than £1,500 and gets more important the more valuable you car is. Many insurers will only offer fully comprehensive cover for higher value cars anyway. There are a few ways of cutting the cost of fully-comprehensive cover, Tesco Value* insurance offers a comprehensive policy but limits the repairs to garages it has relationships with, which lowers the cost. However this doesn’t automatically make it cheapest, ensure you first use the comparison sites in the Cheapest Car Insurance article to check. Don’t think third party’s cheaper than comprehensive Counter logically lesser third-party policies often cost more than fully-comp. Why? Car insurance rates are set by actuaries, who’s job is to calculate risk. And it’s likely third-party buyers are on average a higher-risk group, perhaps as overall they care less about their cars, and so prices are pushed up. To illustrate this in one low risk driver quote, we found £290 for fully-comp compared to £406 third-party. Yet this isn’t a hard rule, third-party can win, but for price’s sake always check comprehensive out too. Good luck everyone! Call Us Now Chat Live Now Clients

  Car insurance prices are on the rise, with the AA reporting that the average driver is now paying £892 per year for a policy. This is an increase of 40% over the previous 12 months. These average prices mainly reflect the disproportionately high premiums offered to young and inexperienced motorists who are deemed to be a higher risk by insurance companies. However, with insurers becoming increasingly risk averse, it is convicted motorists who are on the receiving end of the largest financial penalties. Research revealed that motoring convictions can inflate car insurance quotes that are offered to motorists by up to 78%. We take a look at the impact that four common motoring convictions can have on car insurance quotes. The impact of speeding convictions Speeding offences are probably the most common type of conviction faced by motorists, with the licence points and financial penalties applied as a result relatively well known. However, it is car insurance companies who are responsible for the largest financial penalties, as a speed convictions could push up premiums by 54%. The average driver would then be paying £1,373.68 per year for car insurance, an increase of just over £480. Steve Sweeney, the head of Motor Insurance at MoneySupermarket.com, commented: ‘The cost of car insurance can be high enough, but added to that, speeding convictions can mean points on your licence and can potentially double your insurance premium, as well as landing you with a fine of up to £1,000.’   The impact of “driving without due care and attention” With technology becoming a more prevalent feature in our lives, it is therefore unsurprising that it is beginning to influence motorists. A survey conducted found that 61% of drivers have taken their eyes off the road due to audio devices such as iPods and CD players at some point, while a 23% admitted to making or receiving phone calls. Motorists who are found to be distracted in this way will be considered to be “driving without due care and attention”. This will result in a CD10 conviction which could increase car insurance premiums by up to 27%. For the average driver, this would add £240.84 to their premiums meaning that they would be paying £1132.84. The impact of drink driving convictions Drink driving commercials are common place on UK televisions, and have been for many years. Peak season for such offences is during the Christmas period when alcohol fuelled celebrations are prevalent. Motorists who are found to be drinking while under the influence of alcohol will be issued with a DR10 penalty which can have a devastating impact on car insurance premiums. Motorists with such a conviction to their name could see their premiums rise by a whopping 75%. This translates into a £669 increase, meaning that the average driver would be paying £1,561 rather than £892. Steve Sweeney explained that these increased premiums are fair in light of the dangers created by drink drivers: “Motorists who consume alcohol before getting behind the wheel will find that their reaction times, co-ordination and judgement will be impaired – making them a danger not only to themselves but also to other motorists and pedestrians. It’s not surprising that insurer’s take such a harsh view of those caught driving under the influence.” The impact of drug driving convictions A less commonly publicised issue over the years has been drug driving, but this doesn’t mean that it hasn’t be noted by authorities as a significant cause for concern. This has resulted in the trialling of new drug-driving detection technology where police take a mouth swab and analyse it for traces of illegal substances. It is expected that these techniques will be rolled out nationwide within the next two years. Drivers who are found to be driving while under the influence of drugs will be issued a DR80 penalty which research suggests would increase premiums by up to 78%. This would push up premiums by £695.76, meaning that the average driver would then be paying £1,587.76 over the course of the year for car insurance. Call Us Now Chat Live Now Clients

Here’s a few general tips when buying car insurance. 1. Don’t lie Don’t even be economical with the truth. It might result in a cheaper insurance quote now, but if you ever need to make a claim and they discover that your 1.6 litre car actually has a 2.0 litre engine, your insurance will be voided and that’ll be all she wrote. It’s a lot more difficult to lie about the car now though as most insurance companies require the VIN before they’ll quote you. Even so, lying about occupation, address – any of the other influencing factors could ultimately end up very badly, because if you lie well enough, you’ll be slapped with a fraud charge as well as having to pay for your accident and resulting claim. That Would Be Bad. 2. Beware of the deductible. Your deductible has a huge bearing on how much you pay for your car insurance. It’s the amount below which the insurance company won’t pay out. For example a £250 deductible means that any claim below that value is your responsibility. For any claim higher than that value, you pay the deductible and the insurance company pays the rest. A higher deductible means more out-of-pocket expense in the event of a claim but cheaper insurance. Conversely a lower deductible means less out-of-pocket expense in the event of a claim but more expensive insurance. This is because the lower deductible is putting more cost responsibility on the insurance company. So weigh up your options and if you think you can afford to cover a £500 claim out of your own cash, put that in as the deductible and your premium will plummet. 3. Don’t hammer the phones or web for quotes. Sure you want to compare car insurance quotes but each time you phone a company up or apply through their website to get a quote, they will ding your credit report with a query. Too many queries and your credit score goes down. As little as this should matter to the cost of your insurance, if your credit score goes down, your car insurance goes up. To compare quotes without affecting your credit rating, you can use a car insurance comparison website as these compare quotes from a panel of insurance companies in a single search. 4. Just because you’re renewing doesn’t mean it’s the cheapest. Check your premium with a couple of other companies each time you come to renew. Don’t assume your current premium is still the cheapest. More often than not, the same company will gently increase existing customer’s premiums to cover the cost of discounted offers for first-time-buyers. Call your insurer and you might be able to talk about moving to a different company; often you’ll be put through to a customer retention specialist who will have access to better deals than the first-tier phone operators. From there you might have a bargaining chip. Be careful though – if they call your bluff, you might price yourself out of the market. 5. Do you live in the same place – for insurance purposes I mean? Ask about address re-regioning, re-zoning or re-allocation. Companies often re-allocate their risk boundaries and consequently their customer’s addresses. They typically won’t tell you if the premium has changed unless you ask. Of course this could also mean your car insurance has gone up, not down. 6. Multiple policies gives multiple discounts Most insurance companies will give you additional discounts if you have more than one policy with them. For example if you have your home and car insured with them, both will be discounted by some amount. You need to do some homework here because if you find cheaper car insurance quotes elsewhere and move to another company, any discount you were getting on your home insurance will vanish and that premium will go up. Did you save enough with the new car insurance company to cover the increased premium for your house at the old one? 7. When multiple policies DON’T give multiple discounts Insurance is a strange business. I used to have my house, car and bike insurance all with one company. When we got a second car, they wanted nearly double the premium for it. I shopped around and ended up with a web insurance company. Figuring they had a good deal, I asked about my motorbike and for that they were three times more expensive than the old lot. Long story short – car and house are with the new company. Bike is still with the old company. I’ve no idea why there are such discrepancies but it always pays to shop around. 8. Modified car doesn’t necessarily mean high premiums Typically, if you modify anything on your car, most insurance companies will jack the rate up. At the time of writing there was at least one insurer in the UK who had seen the light. Adrian Flux Insurance were quoted in Max Power magazine in 2008 as giving slightly lower premiums to people with heavily modified cars. Their rationale? If you’ve poured money into your ride to customise it, there’s a good chance you’re going to take more care of it than Joe Average with his crappy Vauxhall Astra / Geo Metro (delete depending on country). In July 2009 they confirmed this with statistics showing that modified car drivers are 20% less likely to be in an accident. 9. Alarms and physical locks In England, discounts are still given on car insurance if you have a Thatcham-approved alarm fitted. This is an alarm system tested by the Thatcham labs to determine its effectiveness. The problem is that most people are oblivious to car alarms going off now. At most, they’re a deterrant. The truth of the matter is that if you have a desirable car, an organised gang can have it on a boat out of the country before you even know it’s gone. This happens a lot to high end Mercedes, Rolls Royce, Range Rovers and[…..]