Could comprehensive car cover be the cheapest option?

(bythesea). Submitted on Mon, 30 Aug 2010

Having worked in the insurance industry as a paralegal, claims manager and consultant, I have picked up a thing or two about how this strange world works. Today I'm opening a window into that world for you. Some of what you'll learn is good, some of it bad, and all of it useful to know.



Comprehensive could be cheaper than third party, fire and theft

Certain insurers are more expensive than others so it might not surprise you that some provider charge more for third party, fire and theft (TPFT) than others do for comprehensive cover.

What's astounding, though, is that sometimes the same insurer will charge the same person and vehicle less for a comprehensive policy than a third party, fire and theft policy.

This happens when insurers analyse their statistics and notice that the people driving third party cost them more in claims.

One reasons for this is that younger drivers tend to choose third-party policies as they are supposed to be cheaper; and young motorists are more likely to have accidents and make claims. This is partly because of the way they drive, and partly because the older vehicles they tend to own are more susceptible to the mechanical failures which cause accidents.

If you're looking for a TPFT policy, always look at comprehensive prices too. It might save you money.

Bad news about your no-claims bonuses

When you get a protected no-claims bonus and you have an accident, your premium is still likely to rise.

What happens is, you have a £200 policy with a 65 per cent no claims bonus. Without the bonus, your policy would be £570. You then have an accident. Next year, you've still got your 65 per cent bonus because it was protected. However, the insurer now sees you as higher risk, and has increased your pre-discount premium of £570 to £685. When you deduct the 65 per cent bonus, your policy now costs you £240 - an increase of £40.

Be careful how you fill in forms

Sometimes you ask for and pay for a protected bonus when you're not entitled to protection. Typically you'll lose your protection if you've had two claims in three years. Then, after the next claim, your bonus starts being reduced.

The problem is that not all insurers are smart enough to put your two claims in three years together when you request protection. Hence they, or your broker, process the insurance with an additional charge for protection that you can't actually use.

Thankfully, this problem should be largely or totally eliminated when you compare online due to automated system that is used.

Small print to watch out for

Some policies are more comprehensive than others. There's no such thing as a standard policy, so keep an eye out for the bits that are important to you. While you should always read the small print, here's a list of some of the more significant elements that can vary:

* Courtesy cars are no longer standard on all comprehensive policies and sometimes you're limited to just 14 days' free usage. You may not get a courtesy car if your vehicle is written off.
* Windscreen cover is also no longer standard and the policy excess and terms for it vary considerably; for example, you might just be covered for two incidents per year.
* Legal expenses and breakdown cover is not always standard, nor is European cover for breakdown.
* You're not always free to choose your own repairer.
* You might not even be automatically comprehensively covered to drive in the EU. (You do, on the other hand, get what's called Road Traffic Act cover, but that's even less than third-party only cover.) Alternatively, your comprehensive cover in Europe may be limited to just 30 days. And bear in mind that most insurers require you to notify them before driving abroad.

 

About the Author

This article was brought to you be confuse.com Compare car insurance with Confused.com - between January and June 2010, 10 per cent of car insurance customers that gave a best alternative price saved over £188.85 by the confused.com website.

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