Car Insurance Myths

The world of car insurance can seem a confusing place, especially if you’re a newly qualified driver and just starting the process of searching for quotes and taking out a policy. The good news is that there’s a wealth of useful advice and information available to drivers. However, there are also a lot of myths surrounding car insurance too.

If you have questions about your car insurance, make sure you ask your insurance provider - don’t just take someone’s word for it or assume something you’ve heard is correct without checking first. 

Let’s take a look at some of the common myths, and dispel some of the false facts surrounding car insurance.

Contents:

Garage parking means cheaper cover

Does comprehensive cover mean I can drive any other vehicle?

One of the most popular misconceptions is that if you have a comprehensive car insurance policy, you’re insured to drive another car as if it’s your own. This is not the case - it’s not as simple as that, so you should always check the terms of your own cover. If you’re not covered, you’ll need to arrange temporary car insurance  if you’re planning to drive a vehicle that either isn’t yours, or one that doesn’t have you as a named driver.


Does having a black box policy automatically mean I get cheaper car insurance?

No, not necessarily. Black Box Car Insurance can save young and new drivers money in the longer term, but it partly comes down to how safe the driver is. Telematics policies monitor the way you drive using a small black box fitted to your car. The device builds a picture of your driving style by monitoring things such as acceleration, braking and speed. Ultimately the safer you drive, the bigger the discount could be at renewal time. But it’s not guaranteed, and the flip side of the coin is that a poor score might even see an increase.


Is car insurance cheaper if I pay by monthly direct debit?

Paying for your car insurance every month is certainly a more affordable way of funding the cost of your policy, instead of shelling out for the full price in one go - which may not be easy to do for some people. However, don’t be fooled into thinking that paying in monthly instalments is a cheaper alternative in the long run - often, providers add a small amount of credit charge to the total cost you’ll pay when you choose a monthly direct debit option. The best approach is to look at the price of both payment options to be sure, but if you can afford to pay for your annual policy in one lump sum, you may be better off doing just that. 


Is it best to stay loyal to my current provider instead of switching?

This is a lovely thought, but not always true. You may like to think that by remaining with your current car insurance provider at renewal time, your loyalty will be rewarded with a hefty discount. Or, any kind of discount at all. This may not be the case, depending on the risk you present to the insurer. You may want to consider switching your policy to another provider, or at least get some comparison quotes. However, keep in mind that different policies offer different cover, and while a different insurer may offer you a cheaper premium, the cover may not be comparable to what you already have.


If I’m involved in an accident, will I definitely lose my no claims discount?

If you’ve built up a good number of years of no claims (the period you’ve been driving without making a claim on your insurance) it can be infuriating to tarnish that unblemished record, as a result of being involved in an accident. That puts your No Claims Discount (NCD) or No Claims Bonus (NCB) at risk. But this doesn’t always happen. Some insurers may still allow you to keep your NCD if the accident wasn’t your fault, and some also offer protection for your NCD - allowing you to make a certain number of claims before losing it. 


I don’t need my own insurance - I’ll use my parents’ policy

Young drivers facing an expensive car insurance premium might be tempted not to take out their own car insurance, but be added onto a parent’s instead. Be careful here. If you only drive your mum or dad’s car occasionally, then you could be added as a named driver and included on their insurance. 

However, this means you can’t be the main driver of that vehicle. So, if you name a parent as the main driver of your own car but drive the vehicle yourself most of the time as an “additional driver”, here’s a wakeup call: that’s actually committing car insurance fraud, via a practice known as fronting. Fronting is illegal.


Does my car need to be insured if I’m not even driving it?

Yes. Even if you’re not driving the vehicle regularly, it still needs to be covered by insurance if it’s parked on the street, your driveway, or in your garage. So, if you’re a student and keep your car ‘at home’ while you’re away at university, it still needs to be insured. However, this can just be third party insurance. 

If you register your car as SORN - obtaining a Statutory Off Road Notification - you don’t need insurance. If your car is declared as SORN it is illegal to drive it. 

Don’t get caught out - thousands of uninsured drivers are being exposed.


If I buy an older car, is the insurance cheaper?

Not always. The type of car you drive does have an impact on the price of your car insurance, but your premium is calculated on more criteria than simply the age of the vehicle. Cars are assigned to one of 50 different car insurance groups, depending on many factors. Age is one, but not necessarily the most important. The size and performance of the car are major factors - so a flashy, high-powered new model will likely be in a higher group than a smaller, modest version. But another key ranking factor is the security of the car, and an older model may not have the same types of devices as newer vehicles.


Is third party only cover always the cheapest type?

No, not always. It might provide the least comprehensive type of cover and it’s legally the minimum kind required by law, but it’s not definitely the cheapest. Some providers might charge a higher fee because drivers who opt for third party may be seen as a higher risk. Remember, third party means that if you’re involved in an accident with another car and both vehicles are damaged, you’ll only be able to claim costs for the damage to the other car - not your own. You’ll have to fund those costs yourself, which could make third party insurance quite an expensive option if you have an accident.


Garage parking means cheaper cover

When you get a quote for car insurance, one of the questions you’ll be asked is where will the car will be parked overnight. As the price of car insurance is calculated on many factors, in reality there probably isn’t much difference between parking in a garage and parking on a driveway. In practice, there could be more chance of you scraping the side of your car getting it in and out of the garage. Bear in mind that any answers you provide when getting a quote need to be truthful – in the event of a claim these details could be checked, and if you aren’t completely honest it could invalidate your claim.

Remember, the best source of information about your existing cover is your insurance provider. 

Find out more about RAC Car Insurance here.