Car Insurance Guides

Read our Car insurance Guides to review and consider their implications to your car insurance policy

Car insurance and the new UK MOT tests

new MOT tests

Car owners woke up to tougher MOT tests and a potential knock-on effect on their car insurance on 20th May. The new rules make the MOT test a more severely strict process that ranks cars in three defect categories. If a car is driven before it is repaired to standard, the driver faces a £2,500 fine and three points.

One in three cars already fail their MOT, and critics believe that the new testing system will mean more people will be reluctant to get their car tested. The rules are also going to have an impact on car insurance. Car insurance companies are already warning that drivers caught driving a car without an up-to-date MOT could invalidate their car insurance.

Instead of a ‘pass’ or a ‘fail’, a car will now be placed in three defect categories – dangerous, major or minor. With the three categories indicating the seriousness of the problems. Cars with the most serious problems will not be allowed to be driven until the car is fixed or taken to a scrapyard.

As well as the difference in results, the tests themselves will delve much deeper into the health of the car. The new tests will check for things such as fluid leaks that pose an environmental risk, missing brake pads and discs, obviously underinflated tyres and an emissions test that will be harder to pass.

With the rules only just being rolled out, it will take some time to see how they impact drivers going forward. Drivers need to be aware of the MOT changes and think carefully about its implications, even on things such as their car insurance.

What young drivers can do to combat a hike in car insurance premiums

When it comes to car insurance, young drivers need all the help they can get and some companies are suggesting they adopt a disciplined approach to their motoring.

The backdrop is a recognition that the costs for young drivers car insurance could be about to rocket, as new personal injury laws are introduced. These new laws, brought about because of the change in the Ogden rate which calculates how much victims get following a lifelong injury, could mean a £1,200 hike for some young drivers.

So, to help youngsters prepare for the worse, a number of advice tips are doing the rounds at the moment and the key points are highlighted below:

  1. Downsize the car

Not always easy to do admittedly, but it makes sense that if you have an expensive car, or one that is considered sporty, or has been modified in some way, then your premiums will be higher. Drivers often need to be remined that car insurance is based on how much the car costs to replace should it be damaged, or stolen. Generally, the older the car and the smaller in terms of body and engine size, the cheaper it will cost to put right.

  1. Up the security

It’s amazing how many people will spend money on making their car look better, yet forget basics such as security. Make it harder for it to be stolen and this could merit a discount from the car insurance company.

  1. The black box trend

Some regard it as a spy in the car and it does track your driving style, telling the provider of the black box – the insurance company – your driving style and how many miles you are covering. Behave yourself and  having this on board could save you up to 20% on your premium.

  1. The sober parent

Name a parent on your policy and the car insurance company could view it as a good thing, because the parent might be using it occasionally and should be a more experienced and careful driver.

  1. Shop around

There are so many companies providing car insurance policies, that getting the right coverage is far easier than before, but you have to be patient and shop around. And you have to create a policy that suits you and one that could save you some money.

Birmingham Ghost Car Insurance Scam Foiled

A major car insurance scam in the Midlands has been broken up by police.

Four men from Birmingham were at the core of a car insurance scam. One of the group acted as a broker for other people trying to get car insurance. He was able to secure cheap deals for his ‘clients’ not because of any professional arrangements, but because he lied on application forms, then charged a ‘brokerage’ fee of up to £500. And because of the lies and falsehoods, the car insurance policies taken out by his clients were invalid and the people were not covered.

The method behind the scam was simple. He simply changed his clients’ details in order to get cheaper quotes and arrangements. This would usually involve a change of address, birth dates and details behind previous claims.

The fraud was detected by police when the insurance company picked up on the fact that multiple claims were being made from one single internet address. What’s more, when police checked an address for a number of the policies, they were made using a cottage in the south of the country whose owners had no idea their address was being used in such a way.

Police raided the homes of the perpetrators of the scam and discovered details of the fraud on mobile phones and computers.

The head of the gang was given a jail sentence, but it was suspended and the other members were ordered to pay costs as well complete set hours of unpaid work.

Representatives of the car insurance lamented the way in which innocent people had been hood-winked by the gang, but pointed out it was the responsibility of the person buying a policy to check that it is valid and that the details are correct. Car insurance companies would not cover claims for polices that might have been taken out in good faith, but were bogus.

Be Careful of Non-Fault Car Insurance Claims

A case reported by a driver in a national newspaper has raised a little known consequence of making a non-fault car insurance claim.

Data from big insurers suggests that shortly after a driver makes a non-fault claim (one that is not their fault and the other driver is found to be at blame), then they are more likely to be involved in an accident in which they are to blame and that they will have to make a claim to cover their liability and cost of repairs.

This might sound slightly bizarre to most, but it’s a consequence of how car companies will securitize big data and make their decision based on the statistical outcome of a future event.

The driver in this case was parked normally, but was hit by another car. He made a successful non-fault claim and his car was repaired. When he came to arrange his next year’s cover with his insurance company, he was told that his premium had doubled for the year. When he objected, his insurance company wrote to him and pointed out the statistical likelihood of having an at faulty claim shortly after his non-fault claim was high. Therefore, they said there was nothing they could do.

The man objected again, the quote was lowered (after the intervention of the newspaper), but still represented a 50% rise and the insurance company said that there was nothing more they could do. The man decided to go elsewhere for his cover.

It’s a salutary tale for drivers seeking to renew their car insurance cover, as it does show the increasing reliance companies have on big data and how they base their prices on statics and likely outcomes, rather than just taking into account the driver’s own record.

Industry observers believe this will happen more and more over the coming years.

Car Insurance Fronting Popular With Parents

Rally Car

A recent research report reveals that parents are defrauding car companies by lying for their children.

The practice, known as car insurance fronting, involves parents falsely claiming that they are the main drivers of their children’s cars.

By doing this, the offspring can save hundreds of pounds on their car insurance bill.

The figures, from the Co-Operative Insurance company, discovered that over 100,000 parents were involved in fronting. Those who were questioned for the survey, on average it was shown that they had been doing it for just over two years and that they had saved around £300.

But, car insurance companies are warning that fronting can prove to be a costly mistake. Should someone be caught, they could find that they are charged higher premiums, or at the other end of the scale, banned from getting insurance altogether.

The report also revealed that the vast majority of those who responded to the survey, actually admitted that they knew that fronting was illegal. However, this did not act as a deterrent and nearly everyone said that they thought, in the case of an accident, they could still make a claim on their insurance.

What’s more, the most common age group for fronting is between 17 and 19, followed by 20 to 22, and 23 to 25. The region’s most prevalent for fronting is the north-east, then Yorkshire and then the south east.

Car insurance companies recommend that if youngsters feel they can’t afford a policy, they should opt for a telematics policy (which monitors their driving style), in order to bring down premiums.