Car Insurance

Because of COVID-19 you may find yourself driving less as you work from home, or more because you’re avoiding public transport. Some of these changes may affect your car insurance cover, so you may need to tell your insurance provider. If you’re renewing a policy, try to give an accurate mileage estimate to avoid overpaying if you’re driving less.

With fewer miles driven and fewer claims, some providers have reduced their premiums: the average annual premium was £640 in the fourth quarter of 2021^[3]. This compares to £755 in March 2020, when the first UK lockdown was introduced. This makes it even more important to compare to find a good value quote for your needs.

For more on driving and the pandemic, see coronavirus and motoring.

^[3] Compare the Market, Premium Drivers Index, December 2021.

If you’re new to driving, you’ll find your insurance is more expensive than for people with more driving experience. This is because 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 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 an annual 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.

See more on car insurance and credit checks.

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 – the amount you’d receive if your car was written off. Alternatively, you can use a free valuation tool like the one from Autotrader to find out your car’s current value or look at used-car listings to see the prices of similar models of a similar age, condition and mileage.

See more on how car values affect premiums.

It depends on the insurance provider. When you compare with us, you can save your searches but you won’t necessarily get the price that you saved when you come back to buy your policy. Some insurance quotes last as long as 60 days, but some can change at any point.

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

Find out everything you need to know about cancelling car insurance.

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. To claim:

1. Check your policy documents for details of how to claim and any time limits on claims.
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.

Find out more about the claim process.

It’s almost certain that it will. In fact, your premium may go up even if you have an accident and don’t make a claim, because the insurance provider might consider there’s more of a risk of you being in another accident. If you’ve protected your no claims discount that shouldn’t be affected, but your basic premium is still likely to go up.

See more on how an accident can affect your car insurance premium.

The excess is the amount the policyholder has to pay towards a claim on their insurance. There are two elements to 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 bigger 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.

See more on car insurance excess.

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 works either through a GPS device – the black box – fitted in your car or a smartphone app. These record things like how you corner, brake, your speed and the time of day and how far you drive.

Black box insurance can be particularly useful for young and inexperienced drivers. It can give insurance providers evidence that you’re a safe driver and could reduce your premiums.

Find out about telematics insurance.

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 accrue 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.