The hidden costs of car insurance

* Everything you need to know about car insurance * All types of policies explained * How to get the right policy for you...

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What Car? Staff
20 Aug 2012 10:17 | Last updated: 14 Jun 2018 00:03

While price is undoubtedly an important factor when comparing car insurance policies, it's important to delve a bit deeper to find the best value for money and avoid paying too much for cover.

This is because what different policies include as standard cover varies significantly, even if you are only looking at fully comprehensive policies, for example.

Common exclusions to watch out for include cover for windscreen damage or legal expenses and access to a courtesy car.

Consequently, while one insurer may work out much cheaper than the others, it may not offer the cover you need.

This in turn could lead to your claim being rejected further down the line, or to you having to take out an expensive add-on policy to ensure that you have the cover you need.

Here, we highlight some of the hidden costs to look out for to ensure that you get the best possible deal on your car insurance.

Differing excesses
The excess is the amount you have to pay towards a claim, so it is one of the first things to check when comparing premiums.

Opting for a higher excess can help reduce the price you pay up front.

Recent research from MoneySupermarket revealed that increasing your excess from 0 to 500 reduces the price of a typical annual policy by about 190.

However, this could prove a false economy should you need to make a claim because you will have to pay more towards the repairs yourself.

You therefore need to look at how much lower the premium is and weigh up whether you think it is worth taking the risk.

Windscreen cover
Fully comprehensive car policies will generally include windscreen cover as standard.

However, if you are looking at third party, or third party, fire and theft, cover, you will probably need to pay extra to add this on.

The excess for this type of claim is usually reduced to about 50, while chips and cracks can often be repaired at no cost to you (as long as you use the firm your insurer works with rather than just getting it done at your local garage).

Legal expenses
The legal expenses insurance that you get with your car policy is designed to cover the cost of pursuing losses arising from accidents that were not your fault.

This includes injury compensation claims, as well as damage to your car.

Most policies do not include this cover as standard, though, meaning that you are likely to have to pay an extra 20 or so a year to get it.

Breakdown cover
Few insurers offer breakdown cover as standard. However, like legal expenses insurance, protection of this kind can often be added to car insurance policies for an extra charge.

You may prefer to do this because it means you have just the one policy number and contact number to know should you break down or be involved in an accident.

However, it is worth shopping around for stand-alone breakdown cover as this can often prove cheaper and more comprehensive than the cover you can add to your insurance policy.

Before taking up this option, it is also a good idea to check that you do not have breakdown cover with another financial product such as a current account.

Courtesy cars
Some fully-comprehensive car insurance policies offer access to a courtesy car while yours in is the garage as standard, while others charge an extra fee for this service.

If you need access to a car at all times to get to work or pick your kids up from school, for example, it is therefore worth looking for a policy that offers a courtesy car as standard and to check exactly when you would qualify for this benefit.

Pay-monthly interest charges
Paying monthly for your insurance is often more expensive because insurers add an 'interest charge' on to monthly payments that can be as high as 25% or 30%.

Therefore, if you can afford to, it's well worth paying for your car insurance policy in one go rather than spreading the cost across the year.

This article has been researched and written by's car insurance partner, MoneySupermarket