Motor Insurance

Fact checking car insurance myths

Which of these 10 common car insurance myths do you (mistakenly) believe?

When it comes to car insurance, there are all sorts of myths – widely held beliefs that have been around so long that they feel like the truth. More often than not, the facts say otherwise. So, to help you work out fact from fiction, we debunk 10 common car insurance myths.

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1) You can drive any car if you have comprehensive car insurance

This used to be true but not necessarily anymore.

In the past, the vast majority of comprehensive policies would include ‘driving other cars’ (DOC) cover. However, this is far less common nowadays.

If your policy does include DOC cover, bear in mind that it will typically only give you third party coverage (even if your actual policy is comprehensive) and may only be effective in certain cases (like emergencies).

2) You don’t have to tell your insurer about an accident if you don’t want to claim

Not true.

If you have an accident, you should tell your insurer. In fact, many insurers stipulate that you must in their terms and conditions. If you don’t, you risk invalidating the cover you have and your insurer can cancel your policy.

It’s important to keep your insurer in the loop after an incident just in case the other driver decides to make a claim against you. Knowing all the facts from your perspective will allow your insurer to act appropriately.

3) The cheapest policies are third party

Generally, not true.

Again, this is one myth that exists because it used to be true but isn’t the norm anymore. This is because figures show that third party policyholders tend to make more insurance claims compared to drivers with comprehensive cover. Over time, premiums have changed to reflect this, and third-party policies can now be considerably more expensive than comp cover.

Of course, this won’t be the case for all drivers as insurers factor in all sorts of things to work out your premium, including your age, job and driving history.

4) My premium won’t rise if I’ve protected my no claims discount

Not true.

If you protect your no claims, the discount you get remains the same, but your baseline premium is likely to increase if you make a claim.

This is because making a claim increases the probability of claiming again, which means insurers will see you as a higher risk driver (pricing your premium accordingly).

5) You can name your parents as main drivers to get cheaper car insurance

This is a definite no-no.

Saying someone is the main driver (when they aren’t) in order to get cheaper car insurance is a type of insurance fraud called fronting.

For many drivers under 25, it can be tempting to list their parents as the main driver to save some cash, but it can void your policy and even lead to prosecution. You can of course add your parents as named drivers which can also help lower the cost of insurance.

6) I don’t need insurance if I don’t use my car

Not true, unless you’ve registered your car off the road.

In the UK, all cars on public roads must have appropriate insurance (this rule is known as ‘continuous insurance enforcement’). If you’re caught without suitable cover, you can be fined £300 and be given six penalty points. In some cases, you could be taken to court and end up with an unlimited fine and be disqualified from driving.

If you’re not going to be using your car for a while, you’ll need to arrange a SORN (statutory off road notification). If you have any full months of car tax left, you’ll also get a refund.

Don’t forget – if your car has a SORN, it must be kept on private land, for example, in a garage or on a private driveway.

7) My car insurance will cover vet bills if my pet is injured while travelling

Generally, not true.

If you’re travelling with your pet and have an accident, your car insurance generally won’t cover the cost of vet bills if they’re injured. You could tenuously claim your pet is a passenger (which car insurance does cover) but the majority of insurers are likely to limit compensation to human passengers.

If you have pet insurance, your policy may cover vet bills, but you’ll need to check your terms and conditions.

8) Car insurance always covers the cost of an at-fault accident

It depends on the circumstances.

An at-fault accident is one that you cause. As a general rule, if you have comprehensive cover and cause an accident, your insurer should cover your repair costs. However, if your insurer felt the accident was caused by your negligence, they can refuse to pay out, leaving you to foot the bill.

Negligence can include:

  • Drink driving
  • Driving while on drugs
  • Travelling with an unrestrained pet
  • Driving while wearing inappropriate footwear

Your insurer can also refuse to compensate you if your car is stolen due to negligence, for instance, if you left it unlocked.

9) Car insurance covers any activity I use my car for

Not true.

Your car insurance policy must reflect the way you use your car, known as its ‘class of use’. For example, you can typically choose from:

  • Social, domestic and pleasure (SDP) – suitable only if you use your car for personal reasons like going to the shops or visiting friends and family.
  • Social, domestic and pleasure + commuting (SDP+C) – you’ll need this if you also use your car to commute to a single place of work.
  • Business use – this usually includes SDP+C but you’ll also be able to use your car for a variety of business-related activities.

If you don’t have the right class of use and need to make a claim, your insurer can refuse to pay out. With that in mind, if you start using your car for different activities, let your insurer know and they’ll be able to adjust your policy.

10) Insurers don’t need to know about car modifications

Not true.

A modification is anything that’s been changed since your car left the factory. This includes visual as well as technical changes. Alloys, wraps and suspension alterations all count as modifications.

Modifying your car can affect its value so it’s something you should tell your insurer about as soon as possible rather than waiting until renewal. If you don’t, they can refuse to pay out so it’s in your interest to keep them updated.

Compare and save money on your car insurance

It’s a good idea to familiarise yourself with the terms of your car insurance so that there are no unpleasant surprises when you come to claim. But remember that insurers set their own conditions, so it’s worth comparing quotes to make sure your policy gives you what you need at a price that’s fair and reasonable.

To help you find great value cover, we’ve teamed up with Quotezone. Simply answer a few questions to see quotes from over 100 insurers; start your quote right here.

Erin Yurday

Erin Yurday is the Founder and Editor of NimbleFins. Prior to NimbleFins, she worked as an investment professional and as the finance expert in Stanford University's Graduate School of Business case writing team. Read more on LinkedIn.

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