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Car insurance costs are starting to rise again, making it as important as ever to take action. Our cost-cutting system includes never auto-renewing and how to time it right to bag the cheapest deal. If under 25, see our Young Drivers' Insurance guide instead.
In this guide
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What is car insurance?
Car insurance covers you if your car is stolen, broken into, or if you're involved in an accident. It also protects other road users if you damage their vehicle or property.
The cost – your premium – is based on how much of a risk insurers perceive you to be – ie, how likely they think you will be to make a claim. Youngsters who have just passed their test will pay more than those who can prove they have been accident-free for years.
Your car must be insured, even if you only drive it every now and then. The Continuous Insurance Enforcement scheme, which came into force in January 2011, means all cars must be covered – unless they're not in use and off the road. It aims to crack down on uninsured drivers by matching up the database of cars on the road with insured drivers.
The only way out is to apply for a statutory off road notification (Sorn), declaring your car will never be driven. See Gov.uk for more.
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Nothing better illustrates car insurers preying on loyal customers than Sarah Cooper's tweet. "My car insurance renewal is £1,200. New policy with same company is £690. How do they justify this?" They don't. They just do it.
Insurers charge more each year, knowing inertia stops policyholders switching. And even though rules introduced in 2016 mean insurers must now tell you the premium you paid last year in correspondence to you, don't rely on this to take action.
If your renewal is coming up, jot it in your diary to remember it. Compare comparison sites' quotes and then call your insurer to see if it can match, or even beat, the best one you found. If it can, you're quids in.
Last year I paid £258 for car insurance. The renewal quote was £608. I paid £199 using your comparison site process. Thanks.
Sue via email
My auto-renew price for two vehicles including a 21-year-old named driver son on a smaller vehicle was £1,024. I followed the recommendations in the guide to get a better deal with Direct Line for £590.
Finally convinced the other half to challenge car insurance renewal quote. Reduced from £520 to £219!
As well as insurers refusing to offer you the special rates available to new customers, there is often an administration fee charged for renewing your policy.
Here's a list of some of the providers that impose a renewal fee. If you know of any others, tell us so we can add them to this list of shame.
One Call £30 Swinton £25 Auto Direct
Done Deal £25 Scenic (motorhome provider) £25 Hastings Direct £20 People's Choice
Correct at January 2019.
With some insurers the mere fact you have selected comprehensive, which includes your car too as well as fire and theft, means you'll be assessed as a lower risk as you're deemed to be more responsible (based on 'actuarial history', which is what an insurer will hold about a particular age group or address, for example, on which it bases its premiums).
This can outweigh the fact you get more cover, and make your policy cheaper. There are no hard and fast rules here; it's a matter of trial and error, yet if you're just looking for the very cheapest cover, never only check third party. It paid off for this MoneySaver...
My auto-renew quote was £210 for third-party only. I went to a comparison site and got comprehensive insurance, breakdown cover and free car hire with the same company for £40 less.
Knowing the difference between the three main types of car insurance is a must:
1. Third party
It's the minimum level of cover to drive legally or even keep a vehicle that has not been Sorn-ed (see Gov.uk for more). Yet it covers very little, only protecting others on the road and property and street furniture from your bad driving.
So if an accident's your fault, third party pays for the damage you cause to another driver's vehicle and their property and protects any passengers. It will not cover you for any damage to your own vehicle so you will be expected to pay this cost yourself.
2. Third party, fire and theft
Third party, fire and theft is an extension of third-party only insurance but also protects your vehicle if it is stolen, or if it catches fire.
Comprehensive is the widest level of cover available. If you have an accident and it was your fault, you can claim the cost of repairing your car and any other damage you may cause to a third party. The cover also includes accidental damage, vandalism and usually windscreen repair.
You may be able to drive other people's cars, although this is likely to be only up to the level of third-party coverage. You may also be covered to drive hire cars. These are not standard features so check with your insurer before you buy so you are clear about what is included.
Third-party cover is generally most suitable for those:
- With cars worth less than £1,000
- Aged under 25 (though also read Young Drivers' Insurance)
- Without a no-claims bonus
- Living in a high-risk area
Comprehensive is a good idea if your car is worth more than £1,500, and is more important the more valuable your car is. Many insurers will only offer comprehensive cover for cars over a certain value anyway.
An MSE investigation in which we analysed more than 18 million quotes from three of the biggest price comparison sites – Confused.com, Compare The Market and MoneySupermarket – has revealed buying your car insurance three weeks ahead of the start day can save you £100s, compared with buying it too early or leaving it until the day before or on the renewal day.
Based on an average price, the cheapest time to buy your policy is 21 days before the start date, with the price differences closely aligned to how much of a risk you're deemed to be, and when the highest number of insurers will provide quotes (see the full price investigation). If you are already within the 21-day period, act now as the price tends to increase closer to the start date of the policy.
We've full info on how to bag the cheapest policy in this guide – see our comparison sites order below.
Here are a few successes from MoneySavers who've got their insurance around the 21-day sweet spot...
Just did mine (24 days early) – saved over £690 over my renewal price.
Cara via Facebook
Renewal quote was about £550. Comparison quote with 16 days to go: £334.
4. Got more than one car? Multi-car insurance can sometimes save £100s – even if you’ve different renewal dates
If you have more than one car in your immediate family or household, this could be for you, and having different renewal dates needn't be a blocker. For some, discounts for adding multiple cars could save £100s, or even £1,000s in some cases, but for others it could actually be more expensive.
What tends to happen is multi-car newbies get hot offers to suck 'em in, but that advantage can disappear at renewal.
Martin's rule of thumb:
If you've currently got a multi-car policy, check separate quotes for each vehicle first – if you've separate policies, check multi-car first.
As comparison sites don't offer multi-car discounts, you'll need to check the multi-car price directly with the insurers below, and then compare those prices with the individual policy costs you get using comparison sites. Here are three steps to follow...
The three insurers above let you set up a policy at your first car's renewal, while the other car(s) stay with their existing insurer, until their renewal.
So you can get a multi-car quote for all your vehicles with different start dates, eg, get cover for your lead car to start in three weeks' time, car two to start in seven months and car three in 10 months. Cars two and three will stay insured with their existing insurer until their current policy ends, at which time they will move across to the multi-car policy, for the remainder of that term.
When you pay for the additional car(s) and when the discount kicks in differs (see 'How multi-car insurers differ' below). Once your multi-car policy ends, all cars will be up for renewal at the same time.
If you want your multi-car cover for all your vehicles to start at the same time, it's simple, you'll just be given one total cost. For different start dates, you'll be given a total price to pay, which'll cover all the cars (you just pay for however long each car is insured for), and you'll also be given an 'annual equivalent price', as if all the vehicles were insured for a full year, to help you compare against other providers.
Admiral At point of quote When you accept quote or when its cover is to start Yes (plus admin fee) Aviva When cover starts for extra car When its cover is to start No LV At point of quote When you accept quote or when its cover is to start No, but will get less discount at renewal
2. Then check existing policies for discounts
Some other insurers do simply give a reduction for each additional policy added, while keeping the policies separate. This can be an especially easy route if an insurer already covers one of your cars, so check the price when the second car's up for renewal.
These are the insurers we have had confirmation offer discounts for a second car: More Than* 15% | Axa* up to 15% | Esure* 10% | Privilege % varies | Sheilas' Wheels* 10%. If you're not already a customer, you can take out two policies in quick succession to get the discount.
3. Finally, check standalone (ie, separate) policies
Sometimes it will work out cheaper to get individual policies for each car, rather than linking them. Use our full comparison system for how to find the cheapest price.
Over three cars (incl our 18yr old son's), we saved £4,600 as our Admiral MultiCar policy reduced it to a much more manageable £2,600. Thanks MSE.
Husband had three cars on multi-car, followed your guide and bought three [separate] policies, saving £1,400.
Car insurance is all about risk. That's why it can work. If you're a high-risk driver and you add someone who is a much lower risk as a second (or third) driver, they can bring down the average risk and you may get a cheaper policy.
This isn't just for young drivers. While it works well for young drivers (see our Young Drivers' Insurance guide) as they are automatically seen as a high risk and are likely to have parents who may be lower risk, it can work for anyone. But of course, it's especially powerful for those with costlier insurance.
The better the driving history and lower the risk, the more impact it should have. Adding someone with a good driving record is likely to make the most savings, but anyone who's a lower risk can help. By law insurers can't discriminate over gender, but age, driving experience and history can make a difference.
This is about trial and error, not logic. Your mum may increase the cost, your brother may cut it, or vice versa. It's just a question of trying different quotes and seeing what happens.
Different insurers respond in different ways. One may cut your costs adding your uncle, another may increase them. A quick way to check is by using the top comparison sites, listed below.
The second driver should be someone who would reasonably drive your car. So don't add Lewis Hamilton, unless you happen to be related (and even then racing drivers are likely to be a very high risk) – but your mum, son, best mate or gran should be OK – as long as they would drive the car.
Never add someone as main driver if they're not. This is known in the industry as 'fronting', and is fraud. If you do it and are caught, you could face a conviction and your insurance will likely be invalid.
As I'm a young new driver my insurer wanted £5,000 but after adding mum and dad it dropped to £1,900.
Followed your guide and added my mum to my car insurance and saved £500 #mumstheword
Have a play with our Car Insurance Job Picker tool and see if small changes to your job description could save you cash. Remember, never lie, as this would be considered fraudulent. If it worked for you, share your success story with our forum users.
Thank you @MartinSLewis, after rewording my occupation on car insurance I have managed to save £400.
I did this too thanks to @MartinSLewis, from creative director to marketing manager = saved £300+. Crazy world isn't it?
If you don't have a job, you face a potential fivefold jump in insurance costs by declaring you're unemployed. The same hikes don't apply to homemakers (housewives/househusbands). If that's you, say so to avoid a hike in costs.
However, only enter homemaker if you're genuinely not seeking work or receiving benefits that require you to seek work. Otherwise, it's fraud. Read the full MSE News story: Unemployed walloped with high insurance.
A monthly payment plan for your insurance is essentially a high-interest loan. For example, if your premium is £1,000 and you want to pay monthly, you could pay £95/month, which is £1,140/year (£140 more) at a huge APR of 25%.
So pay in full, or if you can't afford it, use a credit card with a lower interest rate (or better still, a 0% credit card for spending, ensuring your repayments are big enough to clear it within a year).
If paying by credit card, check if the insurer or provider charges a fee for doing so – though the fee is usually less than the interest charged on monthly instalments.
INSURER APR IF YOU PAY MONTHLY INSURER APR IF YOU PAY MONTHLY Age Co
Esure 27.9% Admiral 17.5% Hastings Direct 29.9% Aviva 21.9% John Lewis 23.6% Churchill 29.2% M&S 23.5% Co-op 15.4% Privilege 28% Debenhams 40.35% Swiftcover 39.58% Endsleigh
Zurich 33% Correct at July 2018.
Don't assume switching is only for those at renewal. This is very important when prices are rising, as they are this year. You may find switching early saves anyway, especially if you didn't follow our full cost-cutting system in the past. There are three points to consider when doing this:
- You can usually cancel existing policies and get a refund for the rest of the year, providing you haven't claimed.
- There will normally be a cancellation fee of about £50 so your savings from switching should outweigh this to make it worth it – the longer you've got to go on your policy, the more likely you'll be better off switching.
- You won't earn the current year's no-claims bonus if you switch so you'll need to be making a substantial saving to make this work.
For many, it will still be a worthwhile move. Here are a couple of case studies to inspire you...
You gave us the confidence to challenge our car insurance mid-policy as we were paying £40 a month. Now we're paying £16.
In November my insurance was £1,200. Now, with a little help from turning 25, I have done a mid-year price check and it's £230!
Insurers usually send out notifications at least 21 days before renewal. This doesn't leave much time, and you could end up rushing to find a cheaper price.
To avoid this, put a warning in your diary six weeks before your renewal date.
Also bear in mind that you can save £100s by getting insurance three weeks before your renewal date – see above for more.
The following are just some of the cancellation fees charged by insurers if you cancel cover outside the 14-day 'cooling-off period' and if you've not made any claims during the current year.
INSURER CANCELLATION FEE INSURER CANCELLATION FEE Admiral
Churchill £53.76 LV £40 Co-op
More Than £50 Debenhams £75 Post Office £55 Direct Line £48.16 Privilege £53.76 Endsleigh
Quotemehappy £30 (2) Esure
RAC £55 Halifax
Swiftcover £52.50 Correct at January 2019. Note: (1) If moving to another non-Hastings policy. (2) Insurance premium tax will be added to the cancellation fee. It increased to 12%, from 10%, on 1 June 2017.
A few insurers let you lock in a quote up to 60 days ahead of the policy's start date, so you can guard against any future premium increases –Aviva* and Quotemehappy do this. Once locked in, the price is fixed as long as your details don't change, but you can always change your mind if you find a cheaper deal (see why buying 21 days ahead is cheapest).
- You can usually cancel existing policies and get a refund for the rest of the year, providing you haven't claimed.
Being on the electoral roll is not just about being registered to vote – it can also make a difference to your insurance premium.
Insurers such as Aviva, Direct Line, Churchill, Privilege, Co-op, Zurich and Endsleigh have confirmed that they use the electoral roll as part of the ID-checking process to combat fraud.
Not being on the electoral roll, or having incorrect information registered, makes it more difficult for insurers to identify you, so they'll probably give you a higher quote or simply not offer cover.
If you're not already on the electoral roll, it's straightforward to do. See our Electoral Roll guide for more information, including the all-important how to get on it.
You can pay a small fee to protect your no-claims discount, meaning you can retain your discount even if you claim. It is worth considering, especially if you have a history of making claims. However, an accident is still likely to see your premium rise, regardless of the impact of your discount.
Insurers often try to sell you additional products such as windscreen or breakdown cover. Avoid buying these if you don't need them and, if you do, always check out the cost of the cover individually first.
Many insurers make a large mark-up by selling add-ons at higher rates than you can get elsewhere. Also, some of these add-ons may already be included in your policy, so read the T&Cs carefully.
So now you know the basics of car insurance, here are the steps you need to follow to ensure you find the cheapest price possible.
Warning: No matter how tempted you are to say someone else is the main driver, or to pretend you have no points, or to deliberately underestimate your mileage to get a cheaper premium – don't. You must be completely honest or it could invalidate your insurance and even lead to prosecution.
Firstly, visit the comparison sites as these zip your details off to a number of insurers' and brokers' websites to find the cheapest quotes. As no single site captures the entire market and prices vary, combining a number of sites is the best way to make a saving. It's best to use all four, but if you don't have time, we've ranked them in order of the sites that most often return the cheapest quotes so you've the best chance of bagging the top deal.
When ranking comparisons, we want to get you to use the best ones as quickly as possible. We focus principally on price, as depending on who you are, you can get cheaper quotes on different comparison sites. However, we also factor in 'softer' features to assess the quality of each.
Ranking on price
We analysed the prices of a large range of insurance quotes given by Compare The Market, Confused.com, Gocompare and MoneySupermarket.
- Step 1. We check how many times each comparison site returned the cheapest or within £5 of the cheapest quote.
- Step 2. We rank the comparison sites based on their 'score' in the first category.
- Step 3. We assess how often each comparison gave a unique cheapest quote, ie, not just equal cheapest with a higher-scoring comparison.
- Step 4. We alter the order to see if it's possible to increase the speed with which you access the cheapest quotes.
Here are the latest scores
This month's results show that MoneySupermarket gives the cheapest quote 59% of the time.
Get a quote from MoneySupermarket and Confused.com and you'll increase your chances of getting a cheaper quote to 84%.
To improve your chances of getting the cheapest quote 97% of the time, get a quote from MoneySupermarket, Confused.com and Gocompare – and if you've time, get a quote from Compare The Market as well.
Follow this order if you're aged 25+ and it's not a company car (if you're under 25, see our Young Drivers' Insurance guide).
Yes and no. Comparison sites send your details to a raft of insurers, then use the information on your credit file to judge your quote. This leaves a 'soft search' on your file which you can see as a reference if you get your credit report – but this worries many people.
Yet crucially lenders CAN'T SEE these soft searches, so they have no impact on your creditworthiness. The only time a hard search – which lenders can see – may go on your file is if you then go on and actually apply for insurance; specifically 'pay monthly' insurance (because in effect they pay upfront for you and you repay the loan over the year).
More info can be found in our Will buying insurance from a comparison site affect my credit score? guide.
Boost chances of finding a cheap quote
Struggling to get cover?
If you have points on your licence or have had one accident or claim too many, you may find it hard to get cover.
If you've been caught once for an offence such as speeding, it's likely you'll have three penalty points, but one strike shouldn't significantly change your risk profile. It's when you reach four points or more that you should change the way you act.
First compare the comparison sites listed, but if premiums are coming back too high, consider enlisting the help of a broker (search the British Insurance Brokers' Association website to find someone local).
Comparison sites let you compare 100s of insurers quickly but they don't capture the entire market as some large competitive insurers only offer their products directly.
We've blagged you a £60 M&S gift card when you go via this Age Co* link to buy a policy by 11.59pm on Thu 28 Feb. The gift card should arrive within 120 days of your policy start date and is for those who've never had an Age UK/Age Co motor policy.
Buy a new car insurance policy direct from Co-op Insurance* by 11.59pm on 20 Jun 2019 and you'll receive £50 of Co-op food vouchers within 75 days of your policy start date. You can't have had a Co-op policy on the same vehicle within the last 12 months.
Use this MSE Blagged Churchill* link to buy a car insurance policy by 11.59pm on Thu 21 Feb and you'll receive a £40 Amazon gift card within 52 days of the start date. It's for anyone who doesn't currently have a car insurance policy with Churchill.
Buy a new motor insurance policy directly from the Post Office* and you'll get RAC roadside and recovery cover for the same vehicle, free for a year. This offer only applies to policyholders aged 49 or under at the time of purchase.
Haggling is not a must – especially if you want to try a new provider – but if you're looking to renew with your current insurer it is well worth getting on the phone to negotiate.
Once you've followed the steps above and got the overall cheapest price, pick up the phone and haggle. If your insurer can beat or match your best quote it saves having to switch policy. If that doesn't work and you're still in the mood, enlist the help of a broker.
I just saved around £300 haggling with Admiral (prompted after the news article on MSE). And they were really friendly to boot.
Step 5: See if you can get cashback on top of the cheapest quote
Once you know which your cheapest provider is, you need to check there aren't any hidden cashback deals. If your second or third-cheapest quotes weren't much more expensive, see if cashback's available for them too, and find the overall winner.
However, note there is no guarantee the quote will be the same going through a cashback site as it is going through a comparison site, so make sure you check the cost carefully. And be aware that the cashback comes from the cashback site, not the insurer, so getting the cashback relies on the deal 'tracking' correctly online.
Things you need to know before getting cashback...
Cashback is never 100% guaranteed. There can be issues with tracking and allocating the payment. Many cashback sites are small firms with limited backing, and you've no protection if anything happens to them.
Money held in your cashback site account has no protection at all if that company went bust. Always withdraw as soon as you're eligible.
While it shouldn't be a problem, if you've used comparison sites before, there is a minor risk that the cashback may not track due to cookies on your computer – so it's good practice to clear those first (read About Cookies).
Step 6: Finally, check the policy carefully before buying
Once you've found the cheapest quotes there are two more important things to do...
Double-check the quotes. Click through to the insurance provider's own website to read the quote thoroughly, as to speed up searches some comparison sites make a few assumptions.
Examine the policy's coverage. Check whether it's suitable. If you want a free courtesy car if yours is being fixed, is it included? While you're there, it's worth playing with the policy details to see if you can lower the price further. Look at the excess, and whether adding drivers cuts the cost.
'I paid 96p for a year's fully comp cover'
Following the steps above often produces huge savings. Those who normally just accept their insurer's renewal regularly see £100s shaved off the cost. And significant numbers of MoneySavers report getting deals for under £100.
In October 2009, civil servant and grandmother Barbara Wakerell smashed the old £14 record for using this car insurance system (see MSE News: 96p car insurance).
Policy price: For Barbara, the cheapest was £120.96 from Swinton Insurance for a fully comprehensive policy, with protected no-claims bonus, and including a courtesy car.
Insurer cashback: The company had its own £70 cashback promo.
Cashback site: She then got a further £50 using a cashback site.
All together that meant the total cost of the insurance was just 96p. Barbara said:
I'm always looking for a bargain so when I found my car insurance for £120.96 I thought I was doing well. But when I also got £120 cashback I realised I had done really, really well. Can anyone beat that?
Obviously car insurance covers you to drive your own vehicle (that you have insured) but some comprehensive policies insure you (not the named drivers) if you're driving the cars of your friends and family – with their permission, of course. Check with your insurer that you definitely have this extension of cover.
You may also be covered to drive hire cars too. However, if your comprehensive cover allows you to drive other vehicles, this is usually only up to the level of third-party coverage – so no theft or fire damage cover is provided.
If you're the generous sort, you can add other drivers to your policy – known as named drivers – and they'll be covered to drive your car. Even if you're not generous, adding a second responsible driver can also help lower the cost of your cover.
If you drive your car outside the UK but within the EU (eg, a day trip to France) or other European countries such as Andorra, Liechtenstein, Norway and Switzerland, an EU directive means you'll automatically get third-party only cover, even if you don't tell your insurer.
This means you'll be driving legally but under the third-party extension of your policy, so your car won't be covered for damage or theft. This third-party cover applies even if you have comprehensive UK cover. But some policies come with full Europe-wide insurance, covering you across the Continent.
If yours doesn't, call your insurer and give your dates of travel and the countries you'll visit (or plan to pass through, even if it's only for a few hours) to extend the policy cover, but there may be a charge.
Our research shows some providers, including Direct Line, Churchill and Privilege, offer this free if you're only going for up to three days, but that's not a universal rule. You can be charged about £20-£30.
If you extend your trip, you're likely to have to pay extra – possibly around £15-£30 more.
And don't forget about breakdown cover. See our full Breakdown guide for more.
If you have an accident and damage someone else's car but decide to cover the costs yourself, strictly speaking you should still tell your insurer about it.
If you do have an accident and your insurer subsequently finds out about it, it could result in higher premiums regardless as the insurer will consider you more of a risk.
In addition, a problem may arise if you have a second accident and it is found to be related to work undertaken for the first. If this does happen it would most likely result in the claim not being paid, rather than cancellation of your insurance or being reported for fraud, but could still end up costing you £1,000s.
If any of your circumstances change it's important to tell your insurer. If you don't and then try to claim, even for an unrelated issue, your whole policy may be invalid.
You should tell your insurer about any change, even if it's just your address. This is crucial as it reduces potential problems in the event of a claim. Trying to get insurance after you've had a policy cancelled is very difficult and expensive.
A change in circumstances includes moving jobs, as insurers believe this can affect your risk. You may also save on insurance if you're in a stable relationship – for instance, living with a partner rather than being listed as single.
And watch out for modifications. For example, putting a tow bar on your car to pull a caravan or trailer counts as a modification, so it's vital to let your insurer know you've got one. Most car insurance policies don't cover attaching a trailer as standard so double-check – some may charge you a slightly higher premium.
Nothing. One is called no-claims discount and the other is no-claims bonus.
Insurers like less-risky policyholders and will reward you if you're able to go a long time without making a claim. So for every year you're claim-free your insurer usually gives you a discount at renewal.
The more years you can go without making a claim, the larger the discount will be at renewal. For instance, an insurer may give you a 30-40% discount if you can go without claiming for the first year of your policy and then give you an extra 10% discount if you can repeat the trick in your second year.
The more changes you make to your car, barring security ones, the more you're charged. Always tell your insurer about any modifications and whether you made them or not, or it may invalidate your policy (a modification is anything that isn't part of the standard vehicle specification, including factory-fitted optional extras such as alloy wheels).
The exception to this rule is if you've a classic car needing insurance – in this instance, insurers accept modifications as a natural part of classic car ownership and don't penalise you with higher premiums.
Even more savings are there for the taking if you can protect your vehicle by securing it. Fitting an alarm or immobiliser (especially one approved by Thatcham) will reduce the bill substantially.
Comparison sites always assume you own the car you're trying to insure. However, many people drive a car owned by their employer, but have to insure and tax it themselves.
This means comparison sites, while useful for benchmarking prices, don't do the trick. First, try a couple of specialists, then see how prices from the comparisons stack up.
The only insurer we could find that gives quotes online for vehicles owned by companies is LV*.
Go through the quote process and it'll ask who owns the car. The quote you get will be based on this. This by no means translates to LV being the cheapest choice – but it's useful to get an idea of what you should be paying. Give us your feedback on LV.
Borrowing a friend's car for the weekend or need to hire a vehicle to move house? It's possible to get temporary insurance for one to 28 days.
Most insurers will cover drivers between the ages of 18 and 75 but some set the minimum age at 21. You may also find it difficult to find cover if you have many points on your licence or a long history of claims.
Insure Daily*, Tempcover.com, Confused.com* and the RAC* offer policies.
Despite some confusion, telematics is not a 1980s game show hosted by Noel Edmonds (that was Telly Addicts!). Telematics prices your premiums depending on how you drive.
A device inside your car monitors your actions behind the wheel. So the better you drive, the less you pay for cover.
Telematics policies have more aliases than a rap group. If you're looking at 'black box', 'smart box', 'pay-as-you-drive' or 'usage-based' insurance then you're looking at a telematics policy.
It works! Forumite vic.star said: "I'm with Insure The Box, a telematics insurer. I paid £980 for my first year (I was 21 when I took out the policy) compared to the cheapest on comparison sites of £1,400!"
The black box feeds data back to your insurer, which takes this into account to reward you; if you can prove you're more Driving Miss Daisy than Fast & Furious, you can get money back on your premiums, high-street shopping vouchers or better prices at renewal.
How do insurers rate you on a telematics policy?
It's not just a case of keeping your hands at 10 and two and shifting smoothly through the gears. Insurers will take the following into account:
- The time of day or night you drive (11pm to 5am may cost more)
- Your speed (stick to the limit!)
- Gentle braking reactions (hard and sharp stopping is NOT good)
- Gentle acceleration and cornering (don't treat your local roads like Silverstone)
Telematics providers will charge you more if you speed or start cornering like Sebastian Vettel. In addition, you won't earn rewards if you don't drive responsibly. With insurance so expensive, any money back on your cover should be an incentive in itself.
While your insurer will be following your driving closely, there are relatively few restrictions on when and where you drive. However, some insurers, such as iKube and Co-op*, have curfews in place, meaning driving at certain times (usually between 11pm and 5am) could result in a fine or an increase in premiums.
Be careful when deciding your excess. The larger the excess, the cheaper the premium usually is, but a large excess may leave you out of pocket if you need to claim.
The excess is the amount you pay towards any claims you make. Say your excess is £250 and you have an accident that causes £1,000 worth of damage to your vehicle, you pay £250 and the insurer stumps up the rest.
A few insurers will substantially reduce premiums for a £1,000 excess, so try this when getting quotes. The downside is having to shell out this amount in the event of a claim.
Some comparison sites give gifts for every policy you take out. At Compare The Market there's a soft toy meerkat (you can choose from eight) for each new policy plus 2for1 cinema tickets and 2for1 at 1,000s of restaurants (see Meerkat Movies & Restaurant trick for full details).
Though remember, don't end up paying a higher premium than you need to because you're sucked in by the incentives on offer from one particular comparison site.
Insurers use this information to help them calculate your premium. The less you drive, the cheaper your insurance so while you always need to give a genuine estimate to avoid committing fraud, it makes it doubly important not to overestimate as you'll also end up overpaying.
The best method is to look at how much you've driven in the past using accurate data, and if your driving habits haven't changed, put the same figures down. If they have, change the figure accordingly. The easiest ways to find out your history is by looking back at old MOT certificates or service documents where your mileage would have been recorded – just compare one year with the next for how far you've driven.
Being a new driver doesn't always have to be expensive. You may even be able to fast-track your no-claims bonus. The Admiral Bonus Accelerator policy gives you one year's no-claims bonus after just 10 months of being insured. This can speed up how quickly you hit the big discount territory.
How to complain about your insurance provider
The insurance industry doesn't have the best customer service reputation and while a provider may be good for some, it can be hell for others. Common problems include claims either not being paid out on time or at all, unfair charges, or exclusions being hidden in the small print. It's always worth trying to call your provider first, but if not, then…
Free tool if you're having a problem
This tool helps you draft your complaint and manage it too. It's totally free and offered by a firm called Resolver, which we like so much we work with to help people get complaints justice.
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