Common car insurance myths unravelled

After results from a survey carried out by Swinton showed alarming gaps in car insurance policyholders’ knowledge, we at Independent Insurance Services decided to give clarity on common misconceptions around this essential cover:

MYTH: If you have comprehensive car insurance, you’re covered to drive anyone else’s car.
STATS: 33% believed this to be true and 14% didn’t know.
FACT: Depending on your age and driving experience you might be covered to drive someone else’s car, but this is not a given on all comprehensive insurance policies as it’s dependent on these factors. Even if you are covered, it’s only third party, so any damage to the car you’re driving won’t be covered. If you’re going to be driving someone else’s car extensively, it’s best to be put down as a named driver. Some insurance providers will allow you to put someone else on the policy for one day or one journey at no extra cost.

MYTH: If you’re in an accident that wasn’t your fault, you don’t have to pay any excess.
STATS: 43% believed this to be true and 16% didn’t know.
FACT: Although in certain circumstances excesses paid by those not at fault can be reimbursed further down the line, it’s not a given that they won’t be paying this when making a claim, regardless of whether or not they were responsible. This is largely dictated by which insurer is paying for the vehicle repairs initially. If the insurers for the party not at fault are paying for the repairs, the excesses will normally need to be paid.

MYTH: Third party fire and theft will cover your stolen car regardless of where it was.
STATS: 39% believed this to be true and 19% didn’t know.
FACT: Unfortunately not. If you’ve stated that you keep your car overnight on a driveway of one address, but it’s stolen from another location, there’s no guarantee that the claim will be upheld. A closer look at any exclusions will be able to tell you whether or not this is the case.

And we’ve decided to add some examples we’ve encountered recently…

MYTH: Protecting your No Claims Discount (or Bonus) will stop your premium increasing the following year after an accident
FACT: This is a common misconception. the protection of the No Claims Discount (NCD) protects the level of discount off the premium you receive, not the premium itself. Having a claim where you are responsible will usually mean an increased premium, but your percentage level of discount taken from this premium will remain unchanged. However, following a ‘fault’ claim you may find it more expensive to protect your NCD.

MYTH: Your address does not affect your premium.
FACT: Your address (or the address where the vehicle is kept) is a key rating factor for insurers, along with the vehicle itself, driver ages, claims history, etc. All postcodes will be rated by insurers differently. These ratings will be dependent on how many claims occur there, if there’s a high number of claimants living in the postcode, and crime rate in the area, amongst other factors. However, you must ensure you are honest about where your vehicle is kept.