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1. “Parking my car in a garage means my car insurance will be cheaper.”
One of the most widespread auto insurance myths is that keeping your car in a garage will result in a much lower insurance premium than parking it on your driveway.
Some 69% of drivers think that if they park their car in a garage overnight, they get a lower car insurance quote than if they parked it on the street.
But parking your car in a garage might actually cost more in some cases. This is because, statistically speaking, parking in a driveway is less likely to result in a car accident than entering or leaving a garage. If you have access to both on-street and garage parking, it is worthwhile to compare quotes for each to see which is cheaper.
2. “My quote is what I will pay.”
A quote is just that: a quote. Companies will base their car insurance quotes on the details you provide. When you’re ready to purchase the policy, your quote could well change if that data is incorrect.
Car insurers pull two reports before giving you a quote: a Comprehensive Loss Underwriting Exchange report and your Motor Vehicle Record. In these reports, you’ll see your insurance claims and traffic incidents. Your final price will likely go up if you didn't include this information on your quote, or if it was incorrect.
When looking for a new car insurance plan, 70% of drivers with a household income of £15,001- £25,000 believe that they will pay exactly what they have been quoted, whereas less than three in five drivers with a household income of £65,001 - £75,000 believe the same.
3. “Lower mileage means my car insurance will be cheaper.”
It's a common car insurance myth that fewer miles driven will result in a reduced premium, but that's not always the case. Drivers with little mileage may occasionally pay more, but this varies by provider. This is because people who only occasionally drive frequently use their car for short trips at busy times - often on unfamiliar roads - which is a greater risk than someone who regularly drives the same route to and from work, for example.
Among the many findings of a recent study developed by Uswitch car insurance experts, we discovered that a majority of drivers (53%) believe that if you drive fewer miles per month, you will pay a lower premium as a result.
4. “I can negotiate my premium to get cheaper car insurance.”
As far as car insurance misconceptions go, this one ranks high: you are unable to negotiate the price of your policy. The amount of risk you pose is calculated by car insurance companies and the rate reflects that risk.
If you were to receive a lower rate by another insurance company, that’s generally because they assess risks differently, but you are not able to take that lower quote to other insurers and expect them to match it. However, there are ways to lower your cost. You can affect your premium by picking the right coverage and taking advantage of discounts.
Generally speaking, there are a lot of misconceptions when it comes to car insurance, and one of the most common ones is that you can negotiate with insurers in order to get a lower premium. 52% of all drivers believe they could lower their insurance if they negotiated with their insurer.
5. “Putting my policy in a parent’s name will lower my premium.”
In order to lower their insurance premiums, young drivers will sometimes say an older or more experienced person is the main driver. This is illegal and it's called "fronting”.
If the case goes to court, you could lose your insurance, get points, get disqualified, and even be fined. You may also find it harder to get car insurance in the future.
But parents and anyone else can be added as additional drivers to your policy, which could lower your rate. Just don't make them the main driver. If you're a young or first-time driver, you may want to consider telematics or black box insurance.
As a matter of fact, this one ranks high in regard to car insurance misunderstandings with almost three out of five (56%) drivers surveyed between the ages of 25 and 34 believing that placing a policy in the name of their parents will lower their premiums.
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6. “New cars are more expensive to insure.”
This isn't always the case, but it's still a little challenging because a car's age affects rates in many ways. First, modern safety features in new cars are more likely to lower the risk of an accident and the likelihood of serious injuries if one does occur.
Interestingly, when it comes to those who believe this misconception, age is a huge factor, as three out of five (63%) of young drivers aged 17-24 years old believe that new cars are more expensive to insure than used cars.
7. “Comprehensive cover means I can drive any car.”
It’s easy to assume that if you have "fully comprehensive" insurance, you can drive anyone else's car, but this isn't always the case. Some policies will cover this, but many will not, so the best thing to do is to double-check your policy documents to make sure you're covered.
If your insurance does cover this, you will only be covered for third-party liability, which excludes damage to the car you are borrowing. You must also first obtain the owner's permission.
The results of a recent survey indicate that almost 40% of drivers think that having comprehensive car insurance ensures that you can drive any other person's car if you have comprehensive cover. Northern Ireland, Wales, and Greater London are the top three regions in which this misconception is the most prevalent, with totals of 50%, 48%, and 46%, respectively.
8. “My credit score has no effect on my insurance rate.”
Many insurance companies evaluate your credit score when you are looking to purchase, switch, or renew your car insurance policy because it shows how well you manage your finances.
Being good at managing money has been proven to be a solid predictor of whether someone is more likely to make an insurance claim, so those who have excellent credit scores and therefore good insurance ratings often pay less for insurance.
Despite the fact that many people consider it trivial, we recently revealed that almost a third (32%) of drivers surveyed believe that your credit score will not have any impact on your car insurance, in spite of the fact that other factors can affect it.
9. “If someone else drives my car, they cover any damage.”
There is a misconception that insurance follows the driver rather than the car. False; the opposite is true. Car insurance follows the car, not the driver.
If a friend borrows your car and gets into an accident, your policy will act as the main insurer. Only if the limitations on your policy are exhausted can your friend's policy take over. Make sure you know how your insurance works before you let someone drive your car. There may be driver exclusions in some plans, so no one else can drive your car.
According to a survey of 2,000 drivers, a quarter (25%) of those surveyed believe that in the event that someone else is driving their car, and they get into an accident, they will be covered by the other driver for the damages.
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10. “Personal auto insurance also covers business use of my car.”
Having personal auto insurance won't cover you if you're self-employed and use your vehicle for business. Make sure your employees' driving records are up-to-date if they use your vehicle.
Even though this isn't one of the most common misconceptions about car insurance, it still catches people out, with nearly two out of five (38%) of drivers aged 17-24 claiming that their personal car insurance will cover the use of their car for business purposes as part of their personal insurance policy.
11. “I don’t have to tell my insurer about an accident that wasn’t my fault.”
You might think that your insurer won't need to know about an accident for which you weren’t at fault—for example, if your car was parked when it happened. Any incident, however small, must be reported.
It's worrying to see that a quarter (25%) of drivers think you don't need to tell your insurer about an accident you didn't cause. Your insurer may cancel your policy or refuse to pay if you make a claim and fail to disclose important information. Your no-claims bonus shouldn't be impacted by reporting a non-fault accident, but it might still affect your renewal premium.
12. “Red cars cost more to insure.”
It's helpful to know that, despite popular belief, the colour of your car has no impact on the cost of your car insurance. There are a few variables used to determine your premium - such as your address, age, driving history, make and model of your car - but the colour of your car isn’t one of these factors.
On the other hand, your insurance premium will almost certainly be affected by any modifications that you make to your vehicle - and getting an after-market paint job or car wrap counts as a modification to many insurers.
A more expensive type of paint can also make a difference sometimes - as it costs more to repair scrapes and scratches - but the colour isn’t a factor.
Among drivers aged 25-34 years old, about a quarter (23%) of those surveyed said they thought red cars were more expensive to insure, while only one in fourteen (7%) said that red cars were more expensive to insure for people over 55 years old.
How to avoid misconceptions
Given the complex nature of car insurance, misconceptions often get passed on as 'common knowledge', which can result in you paying more for car insurance than you need to. Here are a few tips on setting the record straight on these myths about car insurance:
Tips on how to avoid these misconceptions:
Do your research: By using trusted sites when looking at car insurance quotes or even general faqs you are ensuring that the information you're getting is fact not fiction. Trusted sites can be anything from the DVLA to Gov.uk.
Speak to your insurer: By speaking to your insurance company you will be able to clear up any uncertainty you have with renewing your policy or any other concern you have.
Compare quotes: Renewing with your insurer has no real benefits. It's a myth related to car insurance. It might be possible to save money by switching to a different insurer that offers the same level of coverage. You can also transfer your no-claims bonus.
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Methodology and sources
Uswitch.com surveyed 2000 British drivers via Cencuswide asking them whether or not they believed 12 car insurance myths. These myths were sourced by google research [sources below].
Sources
https://www.confused.com/car-insurance/guides/driving-other-cars-on-your-car-insurance
https://www.rac.co.uk/drive/advice/buying-and-selling-guides/car-insurance-myths/
https://www.yourredcar.co.uk/blog/debunking-common-car-insurance-myths
https://www.iii.org/article/8-auto-insurance-myths
https://www.bankrate.com/insurance/car/truths-about-car-insurance-myths/
https://www.gov.uk/government/news/dvla-busts-9-myths-around-sorn-statutory-off-road-notification
https://www.thecarexpert.co.uk/top-ten-car-insurance-myths-busted/
https://www.ageas.co.uk/solved/understanding-insurance/top-5-car-insurance-myths/
https://www.rac.co.uk/business/news-advice/13-driving-myths-uncovered
https://www.theaa.com/breakdown-cover/advice/driving-myths
https://www.whatcar.com/news/british-driving-myths-but-which-ones-do-you-believe/n25022
https://www.experian.com/blogs/ask-experian/car-insurance-myth-busters/
https://www.axamansard.com/lifeandliving/life-hacks/debunking-5-popular-car-insurance-myths
Car insurance myth-busters
Will I be left uninsured if hit by a drunk driver?
Car insurance covering injuries or damage you cause to another person or their property – the third party – is a legal requirement in the UK if you drive on the roads. Insurers have to pay out that third-party liability in almost all circumstances. If you have bought car insurance, almost nothing you do can invalidate that third-party pay-out.
Many other types of insurance are able to exclude claims caused by your bad behaviour. Take part in a reckless vacation activity, or get drunk on holiday, and your travel insurer can decline any claim. But not with car insurance.
The government does not want to pick up the bill for road accidents so wrote watertight legislation making insurers pay. And it would be unfair, wouldn’t it, if you were hit by a drunk driver and the drunk’s insurer didn’t have to pay out to repair your car or treat your injuries?
When must a car insurer pay third-party damages?
- Speeding
- With no MOT
- Not taxed
- In a car unfit for the road
- Drunk
- On drugs
- Driving for a purpose not declared to your insurer (such as commuting or for business when you only had social, domestic and pleasure cover)
- Using a mobile phone or eating/drinking at the wheel, and other minor offences
- Driving without due care and attention, or any other major motoring offence
- Driving when your doctor has advised you not to
- Wilfully driving into somebody/something to cause harm
In terms of third-party liabilities, insurers have a pretty tough time of it. It’s no wonder premiums are so high – we’re all paying for the idiots on our roads.
Just because insurers must pay out for third-party injuries or damages does not mean they must pay out to you if you caused the claim. They may also take legal action against you to recover their costs if they believe you have acted improperly.
When can insurers fail to pay in full?
While insurers cannot usually refuse to cover the third-party liabilities if you are at fault in an accident, they can sometimes refuse or reduce their pay-out to you.
If you have the wrong cover in place or you have behaved negligently, your insurer may reduce how much they pay to you or refuse to pay out at all.
This can be as simple as telling your insurer you always garage your car but leaving it on the street one night and finding it stolen or damaged the next morning. In this case, your insurer might reduce the pay-out. They might try to refuse completely but they would be unlikely to get away with that if you took them to the Financial Ombudsman’s Service (FOS).
If you had never had a garage, or rarely kept your car in it, but had told your insurer you did, that would be misrepresentation. Your insurer would be able to cancel your policy and refund you entirely and refuse to pay out.
But if you left your car out for one night only and it just happened to be the night vandals scraped all the cars in the street, the FOS would likely side with you. The insurer might reduce the pay-out slightly, but could not refuse.
When can insurers refuse to pay claims at all?
If you have been reckless or fraudulent your insurer can refuse to pay out any costs to you. Not only that, your insurer could begin legal proceedings against you to recover any money they paid out to third parties.
Fronting is a crime. It’s fraud. Fronting is when a low-risk driver who benefits from low premiums puts their name down as the main driver of a policy and adds a higher risk driver as a named driver, when really the high-risk driver will mainly drive the car. Usually this is a parent trying to help their child get cheaper insurance.
If the higher risk driver has an accident and the insurer can prove fronting has happened, it can sue those who have defrauded it to recover every penny it has paid out.
What’s the law on car insurance?
Several pieces of legislation combine to mean that you must have a minimum level of car insurance if your car is on the road. Your car insurance must cover you for whatever you use your car for.
Types of car usage insurance
SDP
Social, domestic and pleasure (SDP): covers home and recreation use, such as shopping, visiting friends and holidays/trips away.
Commuting
Commuting: covers a regular drive to a single place of work, including a daily drive to a station to travel to work by train.
Business
Business use: covers driving to more than one place of work, and higher levels can cover visiting clients, carrying samples or even transporting goods for sale.
If you get the wrong level of cover or misrepresent your risks to an insurer, you may find yourself uninsured. Although your insurer might pay out for any third-party liabilities, either because they must under the Road Traffic Act or under their agreement with the Motor Insurers’ Bureau, they can then sue you to recover their costs.
Can I pay for insurance but still be uninsured?
If you have avoided buying the right insurance, not truthfully answered an insurer’s question, failed to provide any evidence request (such as of a previous no claims discount) or deliberately misrepresented the facts, you can be declared uninsured.
Your insurer can refund you the entire premium and refuse to cover you. You will then risk finding it hard – and expensive – to get car insurance ever again.
The police regularly carry out spot checks with experts from the Motor Insurance Database on hand. They often do more than just check a policy is in place but delve into where you are going and what you are using your car for. They then check with the insurer while they make you wait.
If any details do not match, they can seize your car, fine you £300 and issue you with six penalty points.
Three real examples of police seizing uninsured vehicles
From student to work
A trainee debt collector on his way from college to his sponsor employer had the previous day passed his final exam and had become qualified. This meant he was no longer covered for going to work as a student, which is included within SDP cover. He needed to add commuting/business use. As he hadn’t, he was declared uninsured, fined £300, given six penalty points and his car was seized.
The wrong cargo
A van driver had business insurance but was carrying fresh fruit and veg, which was not the cargo he had told his insurer he would be carrying. This left him uninsured. He had to unload the cargo and arrange for another van to come and collect it. His van was seized and he received a £300 fine and six penalty points for being uninsured.
No evidence of no-claims
One driver thought he was insured, had a certificate and had paid his premium in full, but he had not passed on evidence of the no-claims discount he had claimed, as requested by the insurer. The insurer had subsequently suspended the policy and withdrawn cover, leaving the driver with no insurance, six points, a £300 fine and his car seized.
Your questions answered
Am I insured if my car has no tax?
Absolutely yes you are. Although tax is also a legal requirement, not having tax does not invalidate your insurance. There are times, such as driving to a booked MOT appointment, when you can legally drive without tax or an MOT and your insurance remains valid.
If you are prosecuted for having no tax, you must declare this conviction to your insurer. People with convictions do tend to pay more for their car insurance, so you might find your premiums rise.
Am I insured if my car has no MOT?
You can drive insured without a valid MOT. For example, if your car has been off the road and needs a new MOT, you can drive to a booked MOT test without an MOT. If your car fails its MOT you can also drive it away again to get it repaired (providing it is not dangerous to do so).
You are required to maintain your vehicle and keep it in a roadworthy condition. An MOT provides a single snapshot of this only and you should not rely on annual MOTs alone – your insurer won’t.
If your insurer believes you have not maintained your car – and failing to have an MOT could contribute to that – it can reduce any pay-out to you, or possibly decline a claim.
If you are prosecuted for having no valid MOT, you must declare this conviction to your insurer. People with convictions do tend to pay more for their car insurance, so you might find your premiums rise.
Am I insured if I am speeding?
Yes, your insurer will still pay out if you cause an accident while speeding. In fact, declaring that you have an SP30 speeding fine often makes no difference to the premium quoted. You should also declare to your insurer if you attend a speed awareness course to avoid points and a fine. Again, these usually have little impact on premiums.
Having more than one speeding offence – each SP30 lasts three years – can nudge up car insurance premiums, but not by much. Speeding is seen as part and parcel of driving. So many people speed occasionally, there’s no link between those who speed a little and those who have more accidents.
- That doesn’t mean you should speed. The Royal Society for the Prevention of Accidents estimates that inappropriate speed contributes to:
- 11% of all injury collisions reported to the police
- 15% of crashes resulting in a serious injury
- 24% of collisions that result in a death.
If you have black box or telematics insurance your insurer will contact you if you drive too fast. You may pay more as a result and even risk having your policy cancelled.
Am I insured if I drive during the Covid-19 lockdown?
The City watchdog, the Financial Conduct Authority, has instructed insurers to keep people insured during the pandemic, even if they are struggling to pay their monthly insurance premiums. Contact your insurer to arrange a premium holiday.
And insurers understand that many people prefer to drive now than get crowded public transport. You can drive across tiers, for essential and non-essential travel and while volunteering, and still be insured.
There is one area of confusion: the Association of British Insurers says insurers will voluntarily extend social, domestic and pleasure policies to cover commuting to work during the pandemic and drivers need not inform their insurer.
However, the Motor Insurers Bureau, which operates the Motor Insurance Database that is used by police, says anyone stopped while commuting or using their car for work must have commuting or business use insurance in place and notified to the MID.
Our advice is to tell your insurer before you drive your car for a different purpose.
Am I insured if I lied to my insurer?
If you have told your insurer porkies, there is a very real risk that your insurer could invalidate your policy and refund you the premium rather than pay out.
If you cause an accident, your insurer may be obliged to pay for third-party liabilities but could then take legal action against you to recover those costs.
