Not all motor insurance policies are the same. To meet the individual needs of customers, insurers offer a wide variety of products. By shopping around, you will have the best chance of finding a policy with your preferred combination of price, excess and requirements relating to use and repairs.

As a general rule, the lower the premium, the more restrictions may apply to what is covered, how much you would be paid in the event of a claim, and what your options may be in the event of a claim. For instance, low-priced policies might come with restrictions as to where you can send your vehicle for repair or whether new or reconditioned parts are used. More expensive policies may allow more flexibility in your choice of repairers, etc.

The following are important things to consider when buying a motor insurance policy:

  • Are there restrictions on who can drive the vehicle?
  • What extra cover can you buy?
  • Does the policy meet the requirements of your bank or finance company if you are buying the vehicle on hire purchase or a car loan scheme?
  • How much excess will you be required to pay should you need to make a claim?
  • Does the policy require you to take your vehicle to an Independent Damage Assessment Centre (Idac) for damage assessment?
  • Does the policy have restrictions on who is permitted to repair the vehicle?
  • Will reconditioned parts be used for repairs?


About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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