10 common car insurance myths busted

Sort out the car insurance facts from the fiction and make sure you aren't overpaying for your policy.

Kim Jones
Kim Jones
Updated 5 December 2022  | 5 min read

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Choosing the correct car insurance can feel like a complicated task.

With so much conflicting information out there, and baffling jargon to unravel, it’s not surprising that many of us end up overspending, or buying a policy that doesn’t support us with the cover we really need.

We’ve helped sort some of the car insurance facts from the fiction, so you can feel more confident you’re getting the best deal for your circumstances.

Key points

  • There are plenty of common misconceptions about car insurance
  • Some widely-accepted myths may be stopping you from getting the best deals and coverage
  • Understanding how a car insurance policy works could save you money and get you the cover you need

1. Third party policies are cheaper than comprehensive cover

False: Not always. Comprehensive cover offers the top level of protection, covering you for:

  • theft and fire
  • damages to your car and the third party’s vehicle
  • passengers in both cars if you’re in an accident

But it can cost the same as - or be even cheaper than - third party only (TPO) cover which covers injuries or damage to third parties only.

That’s partly because many insurers regard drivers who choose comprehensive cover as being more responsible (and therefore less likely to have to make a claim). Typically, it’s always been high-risk drivers who’ve opted for third party only cover (often younger drivers trying to save money) who make a higher volume of claims. Some providers charge more for this level of cover as a result.

It’s worth comparing prices across all levels of cover when choosing your car insurance because you could get a higher level of cover for less money.

2. If I stick with my existing insurer, I’ll get a loyalty discount - and it’s best to auto-renew

False: Many customers find their policy increases year on year with their insurer - despite there being no changes to the policy such as a new car, address, any claims, or penalty points added to a licence.

In the past, insurers were allowed to offer new customers better deals and discounts than those they made available to existing, loyal, customers.

This amounted to a ‘loyalty penalty,’ in effect.

This practice was disallowed from January 2022 when the Financial Conduct Authority (FCA) brought in new regulations to make insurance pricing fairer across the board.

The new rules state that renewal quotes for current motor insurance customers should be no more expensive than they would be for new customers.

However, it’s still worth shopping around when you get your renewal quote for car insurance as there could be better deals out there for you.

Many insurers auto-renew your policy. That means, unless you give them notice of cancellation, they’ll sign you up for another year of car insurance as soon as your current policy ends.

Before accepting your auto-renewal, you should check the price they’re offering you - and the conditions of the policy too, to see if anything’s changed. It’s always worth comparing policies with other providers to see if you can get a better deal elsewhere. Or you could ask if they’ll come down on price.

Accepting your insurance auto-renewal year after year without challenging it or checking other deals could mean you miss out on savings.

3. If I go direct to the insurer, my insurance will cost less

False: The cost of motor insurance varies widely from provider to provider, so you should compare as many policies as possible to find the best deal for you.

We show you quotes from multiple providers, but don’t charge you anything for our service and we don't add fees or commission to your quotes. Instead, we charge the insurer.

A thorough shop-around can include using comparison sites and going direct to insurers.

Remember though, you should never buy a policy based on price alone. You need to ensure whatever you opt for covers everything you need it to - at the right price.

4. Your insurance won’t cover you if you drink and drive

Not fully: If you’re involved in an accident while drink driving, then, under the Road Traffic Act, insurers must meet the costs of any claim by a third party for injury or damage. But many providers will then try to reclaim these costs from you.

You won’t be able to claim for any injuries you suffer or for damage to your own vehicle, even if you have fully comprehensive cover.

Insurance policies include drink and drug driving in their ‘exclusions.’ They state that you won’t be fully covered if an accident happens when you’re over the limit or driving while unfit through alcohol or drugs.

5. It’s okay to put mum as the main driver, and me as the named driver, on my policy

False: This is a tempting way for young or inexperienced drivers to reduce high insurance premiums. But don’t do it - it's actually a type of fraud known as fronting and will invalidate your policy. It could also lead to a fine or even prosecution.

There are honest ways of reducing your premiums. Adding a more experienced driver - like your mum or dad - as a second driver could help. Or getting a telematics policy that monitors how well you drive.

6. If you have fully comp car insurance, you can drive any car

Not necessarily. It used to be common that policyholders with comprehensive cover were allowed to drive another person’s car.

But now this doesn’t always apply. You need to check your policy carefully to see exactly what’s included before you take the wheel of anyone else’s car. There’s a high chance you won’t be covered.

If your policy does include DOC (‘Driving Other Cars’) cover, it’s usually only intended for emergencies. You’ll also only be covered on a third party basis. So, if you’re involved in an accident that damages the car, it won’t be covered, but it will cover damage to a third party’s car or property.

Insurers typically don’t offer ‘driving other cars cover’ to drivers under 25.

7. If you get a speeding ticket, your insurance premiums will go up

Usually: Any amount of penalty points for speeding can potentially increase your premium.

That’s because insurers generally regard people with speeding convictions as risky drivers who are more likely to have an accident and to therefore make a claim on their insurance.

How much your premiums will increase depends on the seriousness of the offence, how many penalty points you’ve accrued, plus when it happened (whether it’s recent or a few years ago.)

Be honest with your insurer. If you don’t tell them about points on your licence, it will invalidate your policy if you later need to make a claim.

8. Older cars are cheaper to insure

Sometimes. Insurers take into account the value of your car when calculating the cost of your policy.

Older cars can cost less to insure because they tend to be worth less.

On the other hand, though, they probably won’t have the sophisticated alarms and mobilisers that many newer cars come fitted with. This means they’re easier for thieves to break into - so this can push up your insurance price.

Every make and model of car is put into an insurance group from one to 50 which helps insurers decide how to price premiums. The higher the insurance group, the more you’re likely to pay.

In general, smaller, cheaper and lower powered cars are in the lowest insurance groups. More expensive, powerful cars go into higher insurance groups and cost more to insure.

Other things will affect which insurance group your car falls into, too. Things like parts prices and typical repair times, plus what safety and security features your vehicle has.

You can find out which insurance group your car is in using our online tool.

If you drive a classic car, it can be cheaper to insure because you probably do less annual mileage than the average driver, so there’s less chance of you being involved in an accident.

Some insurers also offer discounted premiums to members of approved classic car clubs.

9. Insuring your car for business use will cost more

Usually. If you use your car for work purposes that include anything other than your daily commute - things like driving to other offices, to meet clients, or for training courses - then you need business car insurance.

It can cost more than standard car insurance because some providers will see you as more of a risk. They might assume, for example, that you drive a lot more than the average motorist and that you often have to navigate unfamiliar roads and heavy rush-hour traffic and so are more at risk of an accident.

However, other factors could influence the cost of your premiums more than whether you drive your car for work or not - things like the car you drive, your driving history and annual mileage.

Whatever the case, if you use your car for work, don’t lie about it. If you’re involved in an accident when you’re driving as part of your job, your insurer could refuse to pay out.

Read more about insuring your car for work use.

10. You can’t get insurance if you have a driving conviction

False: Though some insurers won’t even offer you a quote following a serious driving conviction such as drink driving, there are providers that will. In fact, some companies specialise in this sort of cover.

In many cases, having a conviction means you’ll likely be charged more, because you’ll be regarded as a higher risk.

It’s not worth lying when you apply for motor insurance to try to keep the cost down, though.

If you knowingly withhold information on your convictions, your policy will be invalid, any claims refused, and you could face prosecution.