Am I paying too much for my car insurance?

Car insurance is a legal necessity, but with the rising costs of living, and so many different policies to choose from, it’s easy to worry that you’re paying too much for your car insurance. 

Understanding what influences the price of premiums and knowing how to check if you’re getting a fair deal is crucial for making sure you’re not overspending.  

In this article, we’ll explore how you can evaluate your current car insurance policy and look at the different types of coverage available in the UK to help you find the best deal. 

Read on or jump to a specific section:  

• Types of car insurance 
• Factors that influence the cost of your car insurance 
• How to check if you’re getting a good deal 
• When to consider switching insurers 
• The bottom line 

Types of car insurance 

The type of car insurance you choose has a significant role in how much you end up paying.  

There are three main types of car insurance: 

• Third-Party Only  
  This is the most basic level of cover required by the law. It covers any damage or injury you cause to others (including passengers), their vehicles or property. However, it does not cover any damage to your own car or personal injury. Despite being the minimum level of cover, this type of policy is not always the cheapest. In fact, insurers often view those opting for this cover as higher risk drivers, which can push up premiums. 

• Third-Party, Fire and Theft 
  This policy offers the same cover as third-party insurance, but it also protects your vehicle if it’s stolen or damaged by fire. It’s a step up from third-party only cover, providing a bit more peace of mind at an affordable rate. However, it still won’t cover damage to your car in an accident if you’re at fault. 

• Comprehensive 
  Comprehensive insurance is the most extensive type of cover. It includes third-party liability, fire and theft, plus it covers damage to your own car, even if the accident is your fault. While many assume that comprehensive insurance is the most expensive option, that’s not always the case. It’s worth comparing prices for all three types of cover, as comprehensive policies are sometimes cheaper than more limited options. 

---

Also see: What does fully comprehensive insurance cover?

---

Factors that influence the cost of your car insurance 

Several factors can affect the price of your car insurance premiums. Understanding these will help you assess whether you’re paying too much: 

• Age and experience: Younger, less experienced drivers tend to pay higher premiums due to being statistically more likely to be involved in an accident. 

• Car type: The make, model and age of your vehicle will also influence your premium. High-performance or high-cost cars tend to have higher insurance costs because they are more expensive to repair or replace. 

• Mileage: The more you drive, the higher your premium is likely to be. This is because more time on the road increases the chances of an accident. 

• Location: Where you live plays a big role. Drivers in urban areas with higher crime rates typically pay more for insurance than those in rural areas. 

• Driving history: If you have points on your license or a history of accidents, your premium will be higher. 

• No-claims bonus: If you’ve built up several years without making a claim, you can benefit from a no claims bonus, which can significantly lower your premium. 

How to check if you’re getting a good deal 

So, how do you know if you’re paying too much for car insurance? Here are some tips to help you check if you’re getting the best possible deal: 

• Shop around 
  The easiest way to ensure you’re not overpaying is to compare quotes. Use price comparison websites to see if you could get a better deal with another insurer. But also aware that some insurers don’t appear on comparison websites, so it’s worth checking them separately. 

• Look for discounts 
  Many insurers offer discounts for things like using a black box, paying annually instead of monthly, or bundling your car insurance with other policies such as home insurance. Check to see if there are any discounts available to you. 

• Review your no claims bonus 
  If you have a substantial no-claims bonus, make sure it’s being applied correctly. Some insurers might also offer to protect your no-claims bonus for an additional fee, which can be worthwhile if you’ve built up several years. 

• Check your mileage 
  Overestimating your annual mileage can increase your premium unnecessarily. Check your mileage from previous years to ensure that you’re not overpaying based on inaccurate estimates. 

• Don’t auto-renew 
  Allowing your insurance to auto-renew can result in higher premiums. Insurers often increase the cost of your policy year on year, assuming you won’t shop around. Instead, compare prices before your renewal date and switch if you find a better deal. 

---

Also see: What’s the difference between comprehensive and third party car insurance?

---

When to consider switching insurers 

If you’ve followed the tips above and found that you could save money by switching, then it may be time to move to a new provider. However, before you switch, make sure to: 

• Check for cancellation fees: Some insurers charge a fee for cancelling mid-policy, which could set you back financially. 

• Make sure you’re fully covered: Ensure that the policy you’re switching to provides the same or better coverage than your current one. 

The bottom line 

There’s no one-size-fits-all answer to how much you should be paying for car insurance, but with a little research and the use of comparison sites, you can make sure you’re getting the best deal. 

 Always review your coverage annually, shop around and make sure that your policy fits your current driving habits and circumstances.  

By taking the time to review your options, you can avoid overpaying and ensure that you’re getting value for your money on your car insurance. 

And, if you’re ready to start comparing your options, why not head over to Save More Money’s new comparison page? It’s simple, fast and helps you find the best policy for you at the best price.