When you are looking for
car insurance, it can be tempting to choose the cheapest policy
available. However, you have to ask yourself why this policy is so
cheap. Insurance is a business, and companies will not simply be willing
to give policies away cheaply for nothing. In most cases, you will find
that cheap car insurance has a number of drawbacks that can actually
cost you money in the long run.
One key area to check
with cheap car insurance policies is the exclusions. On cheaper
policies, these can be extensive. You may be better off asking what
exactly your policy does cover you for, rather than what it does not.
For example, many cheap policies do not cover you for electronic
failure. This means if your car is damaged through an electrical fault
then you will not be able to claim for any repairs. Make sure you check
the exclusions carefully. If they seem excessive, then you will be
better off looking for another policy. There is no point paying for
insurance that does not provide you with sufficient cover.
You can save on car
insurance by accepting a higher excess. However, some cheap policies can
have exceptionally high excess limits. This could mean you will have to
pay over £500 before the insurance company will cover your claim. This
can be extremely costly, and as most standard insurance claims are under
£1,000, this means you will end up paying the majority of the cost,
every time you make a claim, on your insurance.
Insurance companies have
come under fire in recent years for non-disclosure. Companies are not
obliged to tell you exactly what they need you to disclose to them for
your policy. This means if you accidentally do not disclose some
relevant information (it could be remarkably trivial) then they will use
this as an excuse to get out of paying your claim. Insurers are not
required to ask any questions at the time of application or renewal.
This means it is up to you to research what information your insurance
company might need and then provide it to them in writing when you take
out a policy. Do not forget to keep a copy of this for yourself along
with proof of postage.
Proof of No-Claims
Some insurance companies
may offer you cheap deals if you have no-claims bonuses from existing
policies. However, when you make a claim they could demand proof of this
no-claims bonus before they will process your claim. If you have not
kept a record of this from your previous polices you could end up having
your claim refused, even though you legitimately have a no-claims bonus.
This could happen even if you have been paying for your insurance policy
for months or even years.
Car insurance is so
expensive these days it can be tempting for some people to lie on their
applications forms in order to get cheaper insurance quotes. However,
this can be an enormous risk to take as insurance companies have a lot
of information at their disposal. They can easily check your background
details and discover if you have tried to put in a fraudulent
application. Insurance policies are about trust. It is essential to make
sure you have honestly tried to provide the company with your correct
Fronting is one of the
ways in which people try to get cheaper insurance premiums. This is
inherently pretending that the car belongs to someone else and then
listing yourself as an additional driver. This is exceedingly common
among young drivers who try to claim the car belongs to an older, more
experienced driver (typically a parent) in order to qualify for lower
premiums. However, this is actually a fraudulent crime. If the insurance
company finds out, your insurance will be revoked, and you could be
‘blacklisted’. This means you will have trouble getting insurance from
other providers. You could also face a fine, conviction and a minimum of
six points on your license if you are caught carrying out insurance
You need to report any
minor damage to your car or theft attempts, even if you do not intend to
make a claim. No matter how insignificant you may think this is some
insurance companies may use it as against you in the future. For example
if your car was tampered with and then stolen a few weeks later they
could refuse your claim if you failed to report the first incident.
If you receive traffic
convictions, you have to tell your insurance company. This will affect
your risk factor and insurance providers may wish to put your policy
premiums up. Do not wait until renewal time to try and save money but
let them known straight away. If you fail to inform them of convictions,
and then try and make a claim on your policy, they may refuse.
Making Cheap Car
Insurance Policies Work for You
Cheap car insurance can
be a convenient way to save money on your household bills. However, you
do need to take care to choose a reputable provider who will deal with
your claims fairly. Avoid small, unknown company who may be offshore.
They could be difficult to reach and may not have a sterling reputation
for paying out on claims.
Check the documents over fully before committing yourself and make sure
the policy can provide you with the right cover for your circumstances.
Never lie on your application form, even if you think this will make
your policy cheaper. This can invalidate your cover and is also a
fraudulent offence which could have serious repercussions.
The penalties for not informing your insurance company of changes to
your circumstances can be significant. Your provider could use this as
an excuse not to pay out for claims, even if the changes have nothing to
do with the accident, theft or damage you are claiming for.