Car insurance can be confusing, especially because there are a huge variety of policy types and add-ons available nowadays. It is important to understand what you are and are not covered for by your policy, and especially not to assume that you are covered for something you are not sure about as your premiums could increase, or claims could be rejected if you do so. Below we will outline some of the most common car insurance misconceptions to help you avoid falling into any traps.
“Non-fault’ and ‘non blame’ is the same thing”
In the case of car accidents, the terms “fault” and “blame” do not mean the same thing although they are often mistakenly used interchangeably. “Non-fault” means that your insurer has been able to recover part of the cost of the claim from somebody else and this is not always related to who was the blame for the accident. If your insurer is unable to claim back any money, this is an “at-fault” claim.
Another common misconception is that even if the claim you made was a “non-fault” claim, your insurance premium will not increase when you renew it. This is still a possibility because insurers will often perceive there to be a greater chance of someone making an “at-fault” claim if they have made a “non-fault” claim in the past.
“You don’t need to inform your insurer about every accident you have”
Sometimes in the event of a car accident, it is cheaper to pay for repairs yourself and you may not want to affect your no claims bonus by making a claim. However, even if you do not want to make a claim about an accident you have had, you are still obliged to inform your insurer in writing. You should make it clear that this is information only and that you do not wish to make a claim so that your insurer does not settle the matter with the other driver’s insurer without you knowing.
It is also important to note that most insurance policies will require you to inform the insurer of any accidents within a certain timeframe, even if you are not planning to make a claim and not doing so, could result in that insurance company refusing to provide you with cover in the future.
“Claiming on somebody else’s policy won’t affect yours”
All claims that are made either on your own car insurance policy or on somebody else’s, can cause your premiums to increase in the future. An “at-fault” claim will understandably affect it much more than a “non-fault” claim will and you could also experience an increase even if you don’t make a claim at all. However, claiming on somebody else’s policy will not affect your no claims bonus and you won’t have to pay any excess.
“You are always entitled to a courtesy car”
Many comprehensive car insurance policies will include a courtesy car in the event that you are left without yours as a result of an accident or repairs however there are some conditions that could prevent you from getting one. For example, if your car is “written off” i.e. it is damaged beyond repair, you probably won’t be able to get a courtesy car. It is often the case as well, that your access to a courtesy car is subject to the condition that you take your car to a pre-approved garage that the insurer has selected.
It is also important to remember that if you have an accident whilst you are driving the courtesy car, the level of cover that you are protected by will match that of your standard insurance policy. This means that you will be required to pay out any excess if it needs to be repaired, however the same rules of “non-fault”/”at-fault” claims will apply and you could get a second courtesy car too.
“Comprehensive cover allows you to drive any car”
It is a common assumption that having fully comprehensive cover permits you to drive somebody else’s car however this is not always the case and shouldn’t be regarded as a given. Some comprehensive insurance policies will include DOC (driving other cars) cover, which gives you the minimum third party cover when driving cars that are not registered on your policy, however, this is not always the case. Usually, you will have to add on DOC to your policy and pay extra for it.
In addition, the belief that as soon as you turn 25, you’ll automatically have DOC on your policy is also a myth – some insurers won’t include it on the renewal until you are 25 however you will still have to ask to have it added on.
“Putting your policy under your parent’s name will reduce your premium”
This is also called “fronting” and refers to when you put a parent’s name down as the main driver of the vehicle on your policy in order to make premiums cheaper. It sounds like it makes sense, putting down the name of someone with a lot more driving experience and a good few years of no claims is bound to lower your premiums. However, not only is this an illegal practice, it can also cost you thousands of pounds. If you are discovered to be fronting, your insurer can refuse to pay out for claims and costs may have to be recovered directly from the parent. What’s more, if a claim is rejected, the young driver could be considered to be uninsured and be given a very hefty fine, penalty points and even a driving ban as a result. They’ll have to declare this on any future applications which will make it harder and much more expensive to get insurance.
“You don’t need to inform your insurer if you get a new job”
If you get a new job, you are legally obliged to inform your insurer as it could affect your premium. If you fail to declare this change, your insurance policy could become invalidated. This is because your occupation is one of the things that insurers consider when calculating your premium, and even the most minor change can have an affect on how high risk they perceive you to be. For example, someone like a student or a delivery courier is likely to have a higher premium than an office worker or schoolteacher as they have a higher chance of making a claim.