10 Tips to Choosing Car Insurance
Car insurance is like many other specialised areas - for the uninitiated it can be very confusing, even overwhelming. Thankfully, some simple tips you already know can steer you towards selecting the right policy. Here are 10 common considerations.
1. Decide what kind of insurance you need
For customers with a new or valuable car, or a car loan where the vehicle is security over the loan, or simply want the top level of cover available, then comprehensive car insurance is a popular choice. If, on the other hand, a customer has a comparatively cheap car and wants to protect only against major liabilities (such as being at fault and causing substantial property damage to someone else’s property), then a third party property policy may suit a customers needs. Another option is to elect fire and theft coverage for the vehicle (but not coverage for crash damage).
2. Word of mouth
A great guide to insurance can be available through friends, family and colleagues - such as those who have been involved in a car insurance claim recently. Word of mouth can be a way to hear about whether an insurer is doing a good job. Online reviews can be a useful source of information as well.
3. Good customer service
You want an insurer that is set up to handle any issues quickly and efficiently. One way to assess this could be to get on the phone and call the claims department. See how long it takes to get through, and whether the help on offer seems friendly and capable.
4. Clear documentation
Gone are the days of fine print and impossible-to-understand ‘legalese’. It should be easy for an average person to download and understand policy documentation. Information these days is highly accessible and you should ensure you understand the policy. Always contact the insurer by telephone or email to query anything you don't understnad - before signing up. Remove the last sentence which starts 'Additionally, look for a cooling off period'. A customer shouldn't be buying a policy without understanding.
5. Features and benefits
Not all policies are created equal. Some are more the ‘bare bones’ type, and others have a full suite of features and benefits - such as providing a rental car if your car is stolen, or accommodation if you suffer a loss while on holiday. When you compare policies, it’s important to evaluate the totality of features and benefits, and not make a decision based on price alone.
6. Tailor-make your policy
Due to competition in the market, insurers are steering away from a one-size-fits-all approach to car insurance policies and are instead providing customers the option to choose what they want in their policy. This allows a customer greater freedom - and, potentially, access to greater savings - by being able, for example, to nominate particular drivers, or capitalise on a discount because a customer may drive a lot less than the average driver. If customers have a history of making very few claims over a long period, they might choose to increase their excess in exchange for a reduction in the premium.
7. Choice of repairer
Choosing their own repairer is something many customers like to do because it gives the policyholder more control. It also means the insurer signs off independently on repairs before the work is paid for.
8. Genuine parts
If you own an expensive or desirable car, it might be in a customers interest to choose a policy that stipulates genuine parts are used during any repairs. Genuine parts are parts made by the carmaker (or its suppliers) and they keep the vehicle 100 per cent authentic in terms of its underlying construction and componentry. If this is not so important to customers, then a cheaper option (in terms of the policy) is to allow third-party (or ‘aftermarket’) parts to be used in the repair.
It’s important to note that repairing cars with aftermarket parts is completely legal, provided they are fit for purpose.
9. Payment frequency
An expensive annual insurance premium can put a substantial dent in a customers budget on the day the bill falls due, so it might be wise to look at regular payment options, which allow a spread of payments across the year each month.
10. Loyalty discount
Insurers have awoken to the fact that one of the best customers to have is the loyal, repeat customer. Several inducements are available to customers who fit the bill here. First, many insurers will offer a discount if a customer holds a number of policies with them. These could be several car insurance policies, or home, contents and car insurance - or some other combination of insurances. Make sure you capitalise on that, this may be an option for you if available. Another significant loyalty offer is the maintenance of your no-claim bonus ‘for life’ after a customer has held that bonus for some prescribed period, even if an at-fault claim is subsequently made.