Car insurance

New drivers are considered more of a risk by insurance providers. This is partly because of inexperience, but mainly because most new drivers are young drivers.

There are ways you can help to reduce the cost of your insurance – telematics policies could be cheaper, for example.

Whether it’s better to pay for your premium annually or each month will depend on your circumstances.

Paying your car insurance annually, in a lump sum, is usually cheaper than paying monthly. A monthly payment plan could mean you pay more as you might be charged interest on the instalments.

The insurance provider will carry out a credit check if you want to pay for your car insurance monthly. Providers will also look at your credit score (a soft search) when you compare insurance quotes, but this is just to check your details and won’t affect your score.

To estimate your mileage:

• Work out how many miles you drive every day or week, then add them up to work out your annual use.  
• Or check your MOT certificate or car service record, which will show how many miles you’ve driven. Use this as a basis to calculate your future mileage.

Mileage can affect your car insurance premium – the more you drive, the more of a risk providers consider you to be. Be as accurate as you can when you estimate your annual mileage.

If you underestimate, it could invalidate your policy. If you overestimate, you could end up paying more than you need to.

To work out your car’s value, you can use a free valuation tool like the one from Autotrader. Or look at used car listings to see the prices of models the same as yours that are of a similar age, condition and mileage.

When you compare car insurance with us and enter your registration number, where possible we’ll give you a valuation figure based on the car’s market value. This is the amount you’d receive if your car was written off.

Some insurance quotes last as long as 60 days, but some can change at any point.

When you compare car insurance with us, you can save your searches. Remember though, you won’t necessarily get the price that you saved when you come back to buy your policy.

If you cancel your car insurance policy within the 14-day cooling off period, you might have to pay an admin fee but you’ll get a refund minus the days the policy was active for.

If you cancel later on, you might have to pay cancellation fees and admin fees. You may or may not get a refund, depending on the circumstances and whether you pay for your policy annually or monthly.

To make a claim on your car insurance:

1. Check your policy documents for details of how to claim and any time limits.
2. Contact your insurance provider directly.
3. Get a crime reference number from the police if your car has been stolen or vandalised.
4. Gather the information you need to give to your insurance provider, including details of the other driver(s) and any witnesses. You’ll need to get all these details at the scene.

You must always tell your insurance provider if you’ve had an accident – whether you claim or not. If you don’t tell them, you could invalidate your policy.

There are a few reasons an insurance provider might not pay your car insurance claim. It might be that:

• You’re not covered for what you’re trying to claim for
• There’s a dispute over who’s at fault in an accident
• The provider believes you’ve invalidated your car insurance – perhaps by giving inaccurate information or not telling them about something they should know.

If your claim is turned down and you don’t think it’s justified, you can take action and dispute the refusal to pay your claim.

If you made a claim last year, you’re likely to pay more for your car insurance on renewal.

In fact, your premium may go up even if you have an accident and don’t make a claim. This is because the insurance provider might consider you a higher risk of having another accident. Even if an incident wasn’t your fault, an accident could affect your car insurance premium.

Your no-claims discount shouldn’t be affected if it’s protected, but your basic premium is still likely to go up.

Car insurance excess is the amount you’ll have to pay towards a claim on your insurance. There are two elements of car insurance excess:

• Compulsory excess – this is set by the insurance provider. You might have to pay an additional compulsory excess if you drive a high-performance car or if you’re a young driver.
• Voluntary excess – this is the amount you agree to pay in addition to the compulsory excess. Agreeing a higher voluntary excess can reduce the cost of your insurance, but you’ll need to make sure you can afford to pay it if you make a claim.

Telematics or ‘black box’ insurance uses technology to monitor the way you drive and transmits the data to your insurance provider. If you drive safely, it could lead to cheaper car insurance.

Telematics insurance works either through a GPS device – a black box – fitted in your car or a smartphone app. It records how you corner and brake, your speed, the time of day and how far you drive, for example.

Black box insurance provides evidence that you’re a safe driver and could reduce your premiums. This makes it particularly useful for young and inexperienced drivers.

Older drivers with low mileage may also find it can help save them money.

If you share your car with one of your parents, having them on your policy as a named or additional driver could reduce your premium. But they mustn’t be on the policy as the main driver if they’re not. This is a type of fraud called fronting and it’s illegal.

A no-claims bonus, also called a no-claims discount or NCD, builds up every year you have car insurance without making a claim. You can accumulate up to five years and sometimes more, depending on the insurance provider.

Your NCD can cut the cost of your car insurance when you renew. You can also opt to protect it so that it’s not affected if you do make a claim.

You can officially declare your car off the road with a SORN (Statutory Off Road Notification) and you won’t need to have insurance. But your car won’t be covered if it’s damaged while it’s parked up.

You also won’t be able to park or drive the car on a road legally until insurance is in place and the SORN has ended.

Since January 2022, insurance providers have been required to offer renewing customers a price that’s no higher than what they’d pay as a new customer.

This could make car insurance more expensive for customers who usually shop around every year. But it means that loyal customers who stick with the same policy will no longer be paying more to subsidise those cheaper prices.

However, it doesn’t mean you shouldn’t shop around, as the prices between different providers can still vary widely.

It depends on the insurance provider so be sure to check your policy documents.

In the past policies often covered driving other cars but this is no longer the case. Instead, you could be added as a named driver to the other person’s policy. Alternatively, you could opt for temporary car insurance.

If you make alterations to your car insurance policy, adding a named driver, for example, you may have to pay an admin fee. You’ll also usually need to pay a fee for cancelling your policy or missing a payment.

With a telematics policy, you might have to pay a fee if you go over the specified mileage.

Any fees will be set out in your policy documents. Fees can vary widely among providers. However, you may be able to avoid some of them if you make changes to your account online.

Driving courses like Pass Plus might lower the cost of your premium, but it’s up to the individual provider.

But taking an advanced driving course may make you less likely to be involved in an accident, which will help keep down the cost of your car insurance in the longer term.

The simplest way to see if your car is insured is to check your registration number on the Motor Insurance Database (MID). This is a national register of all the cars insured in the UK.

The free search will tell you whether your vehicle has a current, valid insurance policy in place, but not the details of your insurance.