Now that you know what you’re looking for, you need to know how to find the policy that’s best for you. Here are the important things to look for and what they mean.
Level of cover. This refers to what is covered by a particular insurance policy, or, in other words, what the insurance policy will pay out for or provide. For example, a third party policy will only provide you with financial compensation if you have to pay for the repairs of someone else’s property, while a comprehensive policy will do this as well as pay out in the event of certain damage to your own car.
Limits. Limits are the maximum sum something is covered for. For example, you might get car insurance that covers you for up to £5,000 worth of accidental damage. This means the insurance company will pay for up to £5,000 of repairs.
Exclusions. These are the conditions under which the insurance company won’t pay out. For example, you might be covered for car theft, with an exclusion for unlocked vehicles. This means you can make a claim if your car is stolen, but if it was unlocked at the time of theft the insurance company won’t pay out.
Excess. This is your contribution towards the cost of any claim. Compulsory excess is applied to your policy no matter what, and could increase if the insurer views you as being in a higher-risk category. You get to set the amount of voluntary excess but the higher the excess, the lower the premium. So just remember to set your excess at a level that won’t leave you shocked and out of pocket if you do need to make a claim.
Premium. This is the main cost of your car insurance policy. The premium is the amount you pay to have an active policy. It can usually be paid in monthly instalments or one, annual payment.
Discounts. There are many discounts available for most car insurance policies. Some of the most common are pay-as-you-drive, which cuts prices if you don’t use your car a lot; multi-policy discounts, which could usually cut 10-15% off premiums if you’ve taken out multiple insurance policies with the same provider; discounts of up to 20% for buying car insurance online; and no claims discounts, which gradually reduce premiums for each year you go without making a claim.