10 Tips to Choosing Car Insurance
Car insurance, like many other financial products can be confusing, even overwhelming. Here are 10 common tips to help you choose an insurance polic thats right for you.
1. Decide what kind of car insurance you need
For customers whose vehicle is used as security for a car loan
comprehensive car insurance offers the top level of cover for your
vehicle. It is a popular choice for customers with a new or valuble car
or someone whose car is financed. On the other hand, a customer has a
comparatively cheap car and wants to protect only against major
liabilities (such as being at fault and causing substantial property
damage to someone else’s property), then a third party property policy
may suit a customers needs. Another car insurance option is to elect
fire and theft coverage only for the vehicle (but not coverage for crash
damage).
2. Word of mouth
A great guide to insurance can be available through friends, family and
colleagues - such as those who have been involved in a car insurance
claim recently. Word of mouth can be a way to hear about whether an
insurer is doing a good job. Online reviews can be a useful source of
information as well.
3. Good customer service
You want an insurer that is set up to handle any issues quickly and
efficiently. One way to assess this could be to get on the phone and
call the claims department. See how long it takes to get through, and
whether the help on offer seems friendly and capable.
4. Clear documentation
Gone are the days of fine print and impossible-to-understand ‘legalese’.
It should be easy for an average person to download and understand
insurance policy documentation. Information these days is highly
accessible and you should ensure you understand the policy you are
considering. Always contact the insurer by telephone or email to query
anything you don't understand - before signing up.
5. Features and benefits
Not all insurance policies are created equal. Some are more the ‘bare
bones’ type, and others have a full suite of features and benefits -
such as providing a rental car if your car is stolen, or accommodation
if you suffer a loss while on holiday. When you compare policies, it’s
important to evaluate the totality of features and benefits, and your
needs and requirements, and not make a decision based on price alone.
6. Tailor your policy
Due to competition in the market, insurers are steering away from a
one-size-fits-all approach to car insurance policies and are instead
providing customers the option to choose what features they want in
their policy. This allows a customer greater freedom - and, potentially,
access to greater savings - by being able, for example, to nominate
particular drivers, or capitalise on a discount because a customer may
drive a lot less than the average driver. If customers have a history of
making very few claims over a long period, they might choose to
increase their excess in exchange for a reduction in the insurance
premium.
7. Choice of repairer
Choosing their own repairer is something many customers like to do
because it gives the policyholder more control. It also means the
insurer signs off independently on repairs before the work is paid for.
8. Genuine parts
If you own an expensive or desirable car, it might be in a customers
interest to choose a policy that stipulates genuine parts are used
during any repairs. Genuine parts are parts made by the carmaker (or its
suppliers) and they keep the vehicle 100 per cent authentic in terms of
its underlying construction and componentry. If this is not so
important to customers, then a cheaper option (in terms of the policy)
is to allow third-party (or ‘aftermarket’) parts to be used in the
repair.
It’s important to note that repairing cars with aftermarket parts is completely legal, provided the parts are fit for purpose.
9. Payment frequency
An expensive annual insurance premium can put a substantial dent in a
customers budget on the day the bill falls due, so you might want to
consider regular payment options, which allow a spread of payments
across the year each month.
10. Loyalty discount
Insurers have woken up to the fact that one of the best customers to
have is the loyal, repeat customer. Several inducements are available
to customers who fit the bill here. First, many insurers will offer a
discount if a customer holds a number of policies with them. These could
be several car insurance policies, or home, contents and car insurance -
or some other combination of insurances. Make sure you consider this as
it may be an option for you if available. Another significant loyalty
offer is the maintenance of your no-claim bonus ‘for life’ after a
customer has held that bonus for some prescribed period, even if an
at-fault claim is subsequently made.
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