11 Car Insurance Myths Debunked
Car insurance can be a bit of a minefield. So many terms, so many options, and a whole load of myths that can lead you astray. Fear not, though, because we're here to put things straight and debunk some of the most common car insurance myths floating around.
Myth One: Park Your Car in a Garage for Cheaper Insurance
Contrary to popular belief, parking your car in a garage doesn't always equate to cheaper insurance. The difference in premiums is often minimal, and sometimes, it can even cost more. Why? The risk of accidentally damaging your vehicle while manoeuvring in and out of a garage outweighs that of parking on a driveway.
Myth Two: Third Party Cover Will be Cheaper than Comprehensive Insurance
In reality, third-party coverage policyholders often make more claims, hiking up their policy costs. Moreover, with fierce competition among insurers for comprehensive policies, prices tend to be more competitive.
As a result, many drivers find comprehensive cover equal to or less expensive than third party only, or third party, fire and theft cover. Plus, comprehensive insurance offers the added advantage of covering damage to your own vehicle. So, if you’re looking for a good car insurance policy that’s also affordable, don’t assume third-party cover is always the answer.
Myth Three: Having a Policy in Your Parents’ Name Lowers the Price
Newly-licensed, younger drivers may be tempted to list an older or experienced motorist as the primary driver to lower their premiums. Beware, though, as this practice, which is known as 'fronting', is illegal and will render your policy invalid.
In severe cases, it could lead to a £5,000 fine and difficulty securing insurance later. It's perfectly legal, however, to add a parent as a secondary driver on your policy. This can lower your premium, as long as they're not listed as the primary driver.
Myth Four: There’s No Need to Pay Excess if the Claim Isn’t Your Fault
In reality, if you're hit by an uninsured driver, involved in a hit-and-run, or find your car damaged in a garage, you'll have to cover the excess.
But non-fault claims, like if someone rear-ends you at traffic lights, your insurer usually waives the excess if they can demonstrate you weren't at fault, recovering costs from the third party. Still, you might have to pay the excess upfront, even if you're due a refund later, so choose a policy with an affordable excess.
If the other driver doesn't respond to your insurer, your claim might be classified as at fault, affecting your no-claims bonus. You might need legal action to settle the claim. Afterwards, your insurer would reduce your premium and reimburse you.
Myth Five: Your Job Title Doesn’t Matter
Your job title is among several factors that influence your insurance premium and can significantly affect the cost. Believe it or not, but recruitment consultants are deemed to pay the higher car insurance fees.
Tweaking your job title could potentially lower your premium. But, remember, if your job title doesn't genuinely represent your profession, it could jeopardise the validity of future claims and result in costing you more in the long run.
Myth Six: Black Box Policies Have a Curfew
Most black box or telematics policies have discarded fixed curfews, an attribute common in early versions. Now, insurers look at your diving data to focus more on behaviour – like mileage, speed, braking and accelerating – to determine premiums.
Though night driving could impact your driving score under certain policies, there are very few black box policies that restrict driving hours.Misunderstandings about night driving are just one of many misconceptions about black box policies in general.
Myth Seven: You Aren’t Required to Insure Your Car if You Don’t Drive it
Following the implementation of Continuous Insurance Enforcement (CIE) in the UK in 2011, all vehicles must be insured unless declared off-road with a Statutory Off Road Notification (SORN).
A vehicle can only be SORNed if it's stored off the road on private property, like a driveway or a garage. If it's parked on a public road, even if not in use, it must still be insured.
Myth Eight: Lower Mileage Equals Cheaper Insurance
While it's often believed that driving less results in lower insurance premiums, it isn't always the case. Some providers may charge low-mileage drivers more, viewing them as potentially lacking driving confidence and thus more accident-prone.
Accuracy in reporting annual mileage on insurance applications is super important. The UK's National Travel Survey states the average motorist travels about 8,000 miles annually, but individual mileage varies widely. For an accurate count, consider referring to prior MOT or service certificates.
For those driving fewer than the average miles - under 6,000 - exploring low mileage or pay-as-you-go car insurance can be cost-effective depending on your usage. Pay by Mile insurance, for example, operates on a pay-per-mile basis, involving a monthly subscription for parked coverage and additional charges per mile driven, starting from 4p. Unlike some traditional policies, there's no penalty for monthly payments.
Myth Nine: I Should Let My Policy Renew Automatically Each Year
Loyalty doesn't necessarily reap rewards in the car insurance cover market, as better deals can often be found by exploring other options. The convenience of automatic policy renewal might be appealing, but it could come with a hefty price tag.
Despite the Financial Conduct Authority (FCA) implementing new rules in January 2022 to prevent insurers from offering discounts to new customers while penalising those who don't compare prices, it remains beneficial to ensure you're getting the best value. Remember to compare coverage levels and terms, not just the cost.
Myth Ten: The colour of the car affects insurance
Contrary to a common myth, the colour of a vehicle does not directly impact insurance premiums. Insurance providers consider factors like make, model, year, and driving history, but not colour. While certain colours may attract more attention or be stolen more often, these are not direct influences on rates. Flashy colours like red or yellow may result in more traffic violations, which can indirectly affect premiums, but the colour itself is not a factor considered by the insurer.
Myth Eleven: Your Car Insurance Premium Won’t Increase With No Claims
While it's true that premiums typically decrease annually for young and inexperienced drivers who maintain a no-claims record, most other drivers will see their premiums rise over time, even without filing a claim. This is due to a multitude of external factors influencing insurance cost. For instance, most insurers cap the no-claims bonus, meaning after a certain period, you won't accumulate any further discounts.
Understanding car insurance needn't be daunting. And hopefully we’ve debunked a fair few myths regarding what affects premiums. The key to the best policy isn't hearsay, but understanding your needs, accurately portraying your situation and exploring your options. Smart, informed choices are more likely to lead to affordable, comprehensive coverage. In car insurance, knowledge is power.
Had enough of car insurance myths for the moment? Park them to the side, and check out Carmoola’s car finance options to see if you can drive away in your dream ride.
You can find out more in our FAQs.
Or explore the figures and see what you could potentially borrow using our car finance calculator.