What to consider when choosing a car insurance policy

A car on the open road

Have you recently found yourself considering taking your driving test, buying a second-hand car, and getting out of the house? I know I have due to the whole lockdown and quarantine! If so, one step you need to take is purchasing a comprehensive car insurance policy that covers both you and your vehicle in case of an accident.

Here is brief outline of what I have learned when looking into this.

First and foremost, it is a legal requirement to insure your vehicle with a valid insurance policy. This makes sense as not only it will help protect you from huge repair costs that are the outcome of a crash that is not your fault but can also help cover huge costs where you are at fault.

Choosing your car insurance

To maximise the chance of your claims being paid, it is essential to choose the right insurance company and policy. This includes whether or not you can claim your car insurance excess back.

For this purpose, here is what you should consider when choosing a car insurance policy.

Personal liability and personal injury

Before anything else, you need to put your and your family’s safety first. Therefore, while choosing an insurance policy, you need to consider personal liability and personal injury. Personal liability protects you should you be held accountable for damage or injury to any third party.

Personal injury protects you if you have an accident that causes death, limb loss, or any other serious injury whilst driving. Most offer up to a certain level of cover as standard where you can increase this amount, dependent on your preference.

Premium amount

The premium amount, plainly put, is the amount you pay monthly or bi-annually for the car insurance policy itself. Therefore, it goes without saying that you should consider not just the coverage, reliability, and payout, but also what you can afford. Use an online comparison tool like Comparethemarket or GoCompare to see all policies side by side.  

Insured declared value (IDV)

Insured declared value is your car’s current market value after eliminating the amount of depreciation from it. It is essential to review this factor as it is critical to decide the compensation you will receive if any accident occurs. You can use an online valuation tool, such as Autotrader, to find out your car’s worth.

Reliability and reasonability

It is advisable to take a bit of time to analyse the insurance company to make sure they are reliable enough and offer proper coverage in return for their price. Different companies may quote different prices for similar coverage, so properly analyse the pay-out rates to reliability and choose the right one that suits your need.

Brand reputation

Following on from the previous point, before you purchase a policy from an insurance provider, it is critical to check their market image. This will help you accurately determine the company’s reliability, pay-out ratios, disputes, etc. Drewberry has compiled the top insurance pay-out rates from 2016 to 18 here which should help in your research.

Policy Exclusions

Exclusions are when the insurance policy does not cover certain factors or conditions under your chosen plan. Like with many things, it is advisable to properly read the policy documents thoroughly to avoid any unpleasant events if you need to make a claim later down the line. Some common types of exclusions include consequential loss, breakdowns, wear and tear, and driving under the influence.


Many providers offer discounts based on different factors which can lower the car insurance premiums significantly. For example, if your employer has a group plan with the insurer, if you have a great credit score, or you install anti-theft devices in your car you are likely to get a reduction on your premiums.

Network garages

Throughout the duration of your policy, numerous insurance companies have network garages that deliver certain cashless repair services and/or courtesy cars to you if an accident happens. So, while choosing a car insurance plan, it is advisable to check the company’s garage network and proximity to your location.

Breakdown cover

A car is just a machine made up of various rubber, electrical, and mechanical parts; there is always the possibility that it will stop working at any given time leaving you stranded. So, if you are someone who travels far from home or if you have a somewhat unreliable car, you may want to consider adding breakdown coverage to your car insurance policy to be fully prepared.

Driving experience and previous claims

Insurance companies consider your driving experience, age, previous claims, and no claims discounts when recommending specific coverage and premium costs. For example, if you are a new driver, they may suggest you take extra personal liability coverage with fewer deductibles because people make the most mistakes when starting anything.

The premium rates for drivers under the age of 25 are also generally higher due to young people being four times more likely to cause a crash with other young friends in the car. That statistic drops by a surprising 62% when in the car with older passengers.

On the other hand, experienced drivers who have had accidents in the past may also have higher premiums, simply because they have a poor track record!

I hope you found this article useful and hopefully no more sitting on cramped public transport in 2022…         

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