Financial Factors:

Choosing a car insurance policy can seem complicated and confusing. Like any financial product you purchase, car insurance depends on your personal needs and circumstances. However, the car insurance scene now understands that one policy won’t fit all.

For many people, car insurance policies are all relatively similar, with most distinctions between them revolving around price and level of cover. However, there are a few more factors to be considered when finding a policy that works to your needs.

For example, a comprehensive car insurance policy will pay for repairs to your vehicle, as well as protect you financially against the cost of damage to someone else’s vehicle. Third-party property insurance covers damage to other people's property (e.g. their car or home) and your own legal costs associated with a car accident.

Read on for six vital inclusions to look for in a car insurance policy.

1. Must have features

Personal belongings: Covers loss or damage to your personal belongings following a fire, theft or accident whilst they are in your car. This includes any belongings in your car including CD’s, handbags etc.

Windscreen cover: Repair or replacement of your windscreen following a loss or damage claim.  

Courtesy car: You will be provided with an alternative car to keep you mobile if you are involved in an accident.

Loss or theft of keys: If your keys are lost or stolen your insurer will pay to replace the keys and associated locks.

24 hour helpline: Provide a 24 hour helpline to call in the event of an emergency.

2. Driver discounts

There are numerous discounts to be had when it comes to car insurance, and it is important to be aware of all your options so that you can take advantage of the savings and reduce the cost of your car insurance.

Online purchases: By purchasing insurance online through some providers, you may be eligible for a discount.

Loyalty discount: By staying with the one insurer for a course of time, they will be likely to give you a loyalty discount.

No claim bonus: No claim bonuses are a scoring system to reward safe drivers. For every year you don’t make a claim against your policy, your premium should reduce dramatically.

3. What type of insurance you need

When choosing which cover to purchase it is important to consider the type of car you are driving. If you have a comparatively cheap car and only want to be protected against major liabilities, a third party property policy may be sufficient to save you money on insurance. This type of policy will protect against claims such as causing substantial damage to someone else’s property.

For a new and valuable car, comprehensive car insurance is the more popular choice. It covers theft and accidental damage, damage from natural events, other people’s vehicles and property and help with emergency costs.

4. Customer service and benefits

Choosing an insurer that provides good customer service is of paramount importance. You need to be confident that your insurer can handle any issues quickly and efficiently, and help you when you have an accident. Many providers offer flexible options for payment, instant loans and some, such as Huddle Car Insurance, even offer carbon neutral credits that offset your car's CO2 emissions.

5. An excess that reduces your car insurance premium

Your insurance excess is the out-of-pocket amount you have to pay when making a claim with your insurer. Most insurers will allow you to increase your excess to reduce your premium. This is one of the most effective ways to save on your car insurance costs.

However, it is also important to select a level of excess that you can afford to pay when something goes wrong. Choosing an excess that reduces your car insurance is therefore an important tip when saving on car insurance.

6. How premiums are calculated

Insurance companies approach premium calculation in many different ways However, common factors that may be considered include:

• Driving record
• Type of vehicle to be insured
• Type of cover and excess chosen
• Location of car storage
• Approximate mileage
• The age of the driver
• The intended use of the vehicle (such as private or commercial use)
• Modifications to the vehicle

When searching for a new car insurance policy, there are dozens of options for different policies and providers. Following these tips and doing thorough research ensures that you receive the best car insurance policy for your circumstances.

ABOUT THE EXPERT
Laura Costello is in her final year of a Bachelor of Law/International Relations at Latrobe University. She is passionate about the law, the power of social media, and the ability to translate her knowledge of both common and complex topics to readers across a variety of mediums, in a way that is easy to understand.