Confessions of a car insurance salesman
How can you get the best deal on your can insurance? Who can you trust? And who should you turn to if you need to claim? Our undercover insurance expert reveals all...
Recently, What Car?’s sister title PistonHeads ran a Q&A with an anonymous car insurance industry expert, who has recently left the industry, on its ever popular forums.
Both questions and answers inform and educate, and contain plenty of handy tips for consumers to track down the cheapest car insurance – and how to navigate making a claim. We’ll also tell you some hilarious stories of ridiculous attempts at fraud.
Most of the questions were answered (‘A’) by the original writer, but in some cases others chimed in with supplementary answers (‘SA’). Thanks to everyone who took part. Photos are for illustrative purposes only and persons within them are not participants in the feature.
Q: How can I legally save money on the information I provide when applying for a quote?
A: There are a few legitimate routes:
Overnight vehicle location
Usually, in order of cheapest to most expensive would be garaged, driveway, public road. In a minority of cases, declaring your car as garaged will actually increase your premium over being on the driveway. I can only assume this is due to the amount of people claiming for damage when they've crashed into their own garage. However, this question should always be answered truthfully: where is the car usually left overnight?
Cheaper vehicle doesn't mean cheaper insurance. On a very broad scale, the sweet spot for vehicle value across the board is £4000-£8000.
Insured and spouse
The majority of insurers provide a discount for insured and spouse policies (policyholder and one named driver who is their spouse/civil partner). As long as the spouse has a driving licence, give it a go; they don't need to have any intention of driving the vehicle.
Access to other vehicles
Saying that you have access to another vehicle will either a) reduce your premium; or b) do nothing to the premium at all.
Sometimes they increase the premium, sometimes they decrease it. This is done on a case-by-case basis. If you are under 30, try adding parents to the policy. Over 70? Expect to pay more for your insurance. Often, if the policyholder is over 70, having another driver on the policy of a similar age will actually reduce the premium – even if they're your neighbour and will never likely drive the car.
Q: Are insurance optional extras worth the extra?
A: Insurers and brokers have a much higher mark-up on optional products than they do on the insurance policy itself. This may not be the case if the optional product is sold, underwritten and managed by the insurer directly.
The optional products that have the highest mark-up are generally legal cover (detailed below) and key cover. Generally speaking, most optional extras are provided at a 30%-plus mark-up.
The most common is motor legal cover. Without legal cover, if you need to claim for a non-fault incident and don't claim through the third-party insurer directly, you will enter a conditional fee arrangement (no win, no fee), which usually means 25% of your compensation goes to the solicitors dealing.
If you have motor legal cover, the advantage is you don't need to pay the solicitors' fee (usually up to £100,000 of legal costs). They sometimes will also fight motoring convictions on your behalf if chances of success are reasonable.
In most cases, out of all optional extras, legal cover has the highest mark-up. Usually, you'll see legal cover is sold at £25-£30 per year. The cost of providing the product by the insurance provider is likely less than £5.
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