Top Gear car insurance advice crashed

During Sunday's show the team of Clarkson, May and Hammond looked at buying a car for young drivers and the costs of insurance.

In one case the insurance policy for a young driver was 15 times more expensive than the value of the car.

The show found the cheapest way for young drivers to get insured was on their parents' policy as a named driver for occasional use.

However, Hayley Parsons, chief executive of Gocompare.com, has criticised the show for leading parents into fronting – the practice of insuring a child's car in their own name, then adding their child, the real main driver, to the policy in an attempt to keep costs down.

James May stated on the show: "It soon dawned on us that the only realistic way of getting covered when you are 17 is by going on your parents' insurance. So we got back on the phones pretending to be dad."

Ms Parsons said: "While few people would take Clarkson's suggestion that a sex change could help 17-year-old boys halve their premiums seriously, fronting is a common fraud and we would urge parents to avoid the practice as, if found out, the consequences could be severe."

After the feature on finding a car for a young driver, Richard Hammond said: "Can I just point out before we do move on; if you do decide to put yourself on your parent's insurance and you have a crash, and the insurance company find out that it wasn't really your car, they won't pay out.

"Then they can prosecute you and you might have to go to jail."

Gocompare warned the effects of being caught fronting can last longer.

"Where this fraud is exposed, insurers have the right to cancel the policy or charge the correct premium as a lump sum," Ms Parsons said.

"Drivers who have had a policy cancelled will have to declare this on any future applications and will find it harder and more costly to buy insurance because the majority of insurers would refuse them cover."

She added in the long run it is better for young drivers to hold insurance in their own name to build-up a no claims discount.

Tips on cutting car costs for young drivers

• Generally, the lower the engine capacity, the lower the premium - ideally an engine size of less than 1200cc is best.
  Also, avoid models with letters after it, for example ‘i', ‘sxi', ‘gti' or ‘xl'.
• Avoid vehicles with any modifications from the standard manufacture.
• Consider taking the Pass Plus training course which is designed to give new, young drivers additional practical driving experience. Once completed, the course normally entitles drivers to reduced premiums.
• Shop around for your insurance - don't settle for the first quote you are given.
• The cost of taxing a vehicle can also vary, depending on the CO2 emissions that it produces. The lower the emissions, the cheaper the cost of vehicle tax.

Dangers of No Car Insurance

In these tough times, many of you may have taken double, even triple looks at the monthly budget to see where some extra savings can be trimmed out.

According to AAA, more and more of you are taking the savings out of your car insurance- something just about everyone will tell you is a bad idea.

AAA Insurance is finding that many Virginians are cutting back on auto insurance deductibles as a way to save money, but are actually setting themselves up to spend much more in the long run.

As the summer months roll in and more and more people are out on the roads, there's a warning out that many of these drivers are turning up uninsured as a way to save money, which could set those folks up for a major disaster in the event of even a minor accident.

Paul Scott said he had no idea his insurance had lapsed, meaning his little fender bender could end up costing big time. "I might be paying their deductible and now the Virginia's $500 uninsured motor vehicle fine, then I have an accident on my record which will make my premiums go up," Scott said.

And that's just for a minor accident with no injuries. Larry Fallen, with Fallen and Associates, has been selling insurance for 30 years. He says he hasn't had too many people looking to cut back on their insurance and says that's a good thing, especially when you're dealing with liability.

"If you were to get sued in a court of law, you could lose your home, your life savings," Fallen said.

Consequences Scott can't afford, even though no one was hurt and the damage minimal. "This could cost me $1,000 easy in the first year," Scott said.

AAA is putting out some ideas on how to save, without putting yourself in financial jeopardy. First, ask your carrier about discounts, which are often offered with multiple policies. Second, increase the deductible. The higher the deductible, the more you save, just make sure you can afford it in the event of trouble. Third- adjust your coverage as your car ages. And finally, shop around, every year. That will keep your carrier on their toes and keep you in touch with rates that can and will vary.

Car Insurance - Top Insurance Companies

In many jurisdictions it is compulsory to have vehicle insurance before using or keeping a motor vehicle on public roads. Most jurisdictions relate insurance to both the car and the driver, however the degree of each varies greatly.

A 1994 study by Jeremy Jackson and Roger Blackman[1] showed, consistent with the risk homeostasis theory, that increased accident costs caused large and significant reductions in accident frequencies.

 Australia

In South Australia, Third Party Personal insurance from the Motor Accident Commission is included in the licence registration fee for people over 16. A similar scheme applies in Western Australia.

In Victoria, Third Party Personal insurance from the Transport Accident Commission is similarly included, through a levy, in the vehicle registration fee.

In New South Wales, Compulsory Third Party Insurance (commonly known as CTP Insurance) is a mandatory requirement and each individual car must be insured or the vehicle will not be considered legal. Therefore, a motorist cannot drive the vehicle until it is insured. A 'Green Slip,'[citation needed] another name CTP Insurance is commonly known by due to the colour of the pages the form is printed on, must be obtained through one of the seven main insurers in New South Wales.

 Canada

Several Canadian provinces (British Columbia, Saskatchewan, Manitoba and Quebec) provide a public auto insurance system while in the rest of the country insurance is provided privately. Basic auto insurance is mandatory throughout Canada with each province's government determining which benefits are included as minimum required auto insurance coverage and which benefits are options available for those seeking additional coverage. Accident benefits coverage is mandatory everywhere except for Newfoundland and Labrador. All provinces in Canada have some form of no-fault insurance available to accident victims. The difference from province to province is the extent to which tort or no-fault is emphasized.[2] Typically, coverage against loss of or damage to the driver's own vehicle is optional - one notable exception to this is in Saskatchewan, where SGI provides collision coverage (less than a $700 deductible, such as a collision damage waiver) as part of its basic insurance policy. In Saskatchewan, residents have the option to have their auto insurance through a tort system but less than 0.5% of the population have taken this option.[2]

 Ireland

The Road Traffic Act, 1933 requires all drivers of mechanically propelled vehicles in public places to have at least third-party insurance, or to have obtained exemption - generally by depositing a (large) sum of money with the High Court as a guarantee against claims. In 1933 this figure was set at £15,000. The Road Traffic Act, 1961 [1] (which is currently in force) repealed the 1933 act but replaced these sections with functionally identical sections.

From 1968, those making deposits require the consent of the Minister for Transport to do so, with the sum specified by the Minister.

Those not exempted from obtaining insurance must obtain a certificate of insurance from their insurance provider, and display a portion of this (an insurance disc) on their vehicles windscreen (if fitted). The certificate in full must be presented to a police station within ten days if requested by an officer. Proof of having insurance or an exemption must also be provided to pay for your motor tax.

Those injured or suffering property damage/loss due to uninsured drivers can claim against the Motor Insurance Bureau of Ireland's uninsured drivers fund, as can those injured (but not those suffering damage or loss) from hit and run offences.

 South Africa

South Africa allocates a percentage of the money from gasoline into the Road Accidents Fund, which goes towards compensating third parties in accidents.[3]

 United Kingdom

In 1930, the UK government introduced a law that required every person who used a vehicle on the road to have at least third party personal injury insurance. Today UK law is defined by The Road Traffic Act 1988, which was last modified in 1991. The act requires that motorists either be insured, have a security, or have made a specified deposit (£500,000 as of 1991) with the Accountant General of the Supreme Court, against their liability for injuries to others (including passengers) and for damage to other persons' property resulting from use of a vehicle on a public road or in other public places.

The minimum level of insurance cover commonly available and which satisfies the requirement of the act is calledthird party only insurance. The level of cover provided by Third party only insurance is basic but does exceed the requirements of the act.

Take advantage of ways to save on auto insurance

here are proven ways to save money on auto insurance, the Insurance Information Institute said in an e-mail. Dropping necessary coverage should not be one of them. 

Shop around: Get at least three price quotes. Call companies directly or access their Web sites. The Oklahoma Insurance Department has an online guide, "Choosing your automobile insurance policy" at tulsaworld.com/ChoosingAuto. This includes a "rate table" for 19 major insurance companies serving Tulsa — from Allstate to USAA Casualty — in five categories: "16-year-old driver, no accidents or moving violations in past three years" to "70-year-old driver, no accidents or tickets in past three years." 

Higher deductible: Your deductible represents the amount of money you pay before your insurance policy kicks in when you have a claim. By requesting higher deductibles, you can lower your premium. Raising your deductible from $250 to $500 reduces the cost of collision and comprehensive coverage up to 30 percent. Raising it to $1,000 saves 40 percent. 

Check insurance before buying a car: Premiums are partly based on vehicle sticker price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft: air bags, anti-lock 

brakes, daytime running lights and anti-theft devices. Favorite theft targets cost more to insure. Information to help you select the car to buy is available from the Insurance Institute for Highway Safety at tulsaworld.com/InsuranceRisks. 

Reduce old car coverage: Drop collision and comprehensive coverage on older cars. It might not be cost-effective to insure cars worth less than 10 times the amount you would pay for coverage. It makes no sense to pay comprehensive or collision on a car worth less than $1,000, as claim payments would not substantially exceed your premiums minus your deductible. Banks and credit unions can tell you the worth of a car by its age, or you can look it up online on the Kelley Blue Book attulsaworld.com/BlueBook. 

Cover home and auto with same insurer: Most insurers give discounts to customers buying two or more types of insurance from them. Reductions also apply to customers insuring more than one vehicle with the company. Insurers also reduce premiums for longtime customers with good claim histories. 

High FICO score: A good credit score lowers premium costs and vehicle financing fees. Using credit ratings makes insurance rates more accurate, fair and objective. Drivers with long, stable credit records have fewer accidents than drivers who don't. 

Discounts: Insurers offer discounts to accident-free policy holders with no moving violations, for driving fewer miles than the national average, for taking defensive driving courses and to young people with good grades.

Car insurance

If you run a car you have to insure it - that's the law. The type of insurance you get varies according to the extent of protection it provides and how much it costs you.

The costs

The price of insurance can add a lot to the cost of motoring so it's worth knowing the factors that affect the premium you are quoted. Shop around and compare quotes from different insurers. They base their premiums on their claims experiences, which naturally differs.

One company may see your area as higher risk than others. One may charge more because of your occupation. Shopping around on the internet makes it even easier because you can quickly see the effect of, for example, accepting a larger excess.

The starting point is the type of car you want to insure. There are many different insurance categories, with price, performance, and the cost of replacement parts the main factors that dictate the one your car falls into. Driving a smaller car is the best way to cut the cost of insurance.

Your age, sex and address all affect the price you are quoted. Young male drivers generally are charged the most, while women in their 50s pay the least. And you will usually pay more if you live in a city rather than in a rural area. Parking your car on the street overnight, rather than in a garage, will also mean higher premiums.

It is possible to make your insurance cheaper by increasing the 'excess' amount on the policy. This is the amoung of money that you will have to pay towards repairs before the insurer pays out. The higher the excess, the cheaper the premium.

The best time to look for car insurance is when you are due to renew your current cover. Cancelling a contract when it still has time to run is likely to incur a penalty charge. However, it can still be worth switching insurer if the savings are greater than the penalty. See the section on getting the best deal below.

You may be given the option of a payment plan to pay your car insurance premiums. These are basically a loan from the insurer that you then pay back in monthly instalments. The insurer won't shout about it, but these plans can have punishing interest rates. They may be offered on a 0% interest basis, or you could investigate the possiblity of using a 0% credit card with regular repayments to cover the cost. Otherwise, it is best to pay for insurance up front.

High risk categories

Your age, sex and address all affect the price you are quoted. Young male drivers generally are charged the most, while women in their 50s pay the least. And you will usually pay more if you live in a city rather than in a rural area. Parking your car on the street overnight, rather than in a garage, will also mean higher premiums.

Some insurers might class you as higher risk if you are a sports professional, entertainer, barman, chef or builder, among other occupations. But you may be able to avoid having your premium loaded by shopping around. Some insurers specialise in covering people traditionally regarded as higher risk, or non-standard. Even if you can't avoid having your premium loaded, the extra you are charged is now typically in the region of 10%-15%, down from 30% or 40%.

If you suffer from a health condition that could affect your ability to drive, including epilepsy, vision impairment, certain heart conditions or sleeping disorders, or if you are taking any medication that could do the same, you must inform the DVLA. If you don't, you could be charged with a criminal offence.

Get the best deal

If you want to compare several insurers to find the best deal you can use an online comparison website. We have one here at This is Money.

Unfortunately, searching just one site will not guarantee that you are seeing all the policies available to you. There are several comparison sites out there and each of them competes to compare the widest range of insurers, but no one site has them all.

Additionally, some insurers will not be displayed on any comparison sites.

As a loose guide, we would recommend that you search the following comparison sites to ensure you a comparing most of the car insurance market:

Moneysupermarket (Moneysupermarket powers the This is Money car insurance finder.) 

GoCompare 

Conparethemarket 

Confused 

Uswitch

Each comparison site should only take a few miutes to generate a quote for you, so it is worth checking them all.

Finally, as well as the comparison sites, get quotes directly from Norwich Union and Direct Line - two insurers that are not found on comparison sites but who are known to provide competitive quotes.

Insurers will often offer discounts on their prices or special deals that only run for a short time. It may be that an insurer is offering to beat your renewal quote, or is offering to insurer your for 12 months for the price of 10. Keep an eye out for any deals.

How the no claims discount works

You typically get a 30% discount after one year of claim-free driving, rising to 65% after four or five years. But companies vary. Some go up to a 70% maximum while others specialising in younger drivers will give higher discounts at an earlier stage.

Many insurers now offer the opportunity to pay a bit more to protect your no claims bonus. The rules vary but you may be able to make two claims in three years, for example, before your bonus is affected. Protecting your bonus will not stop your insurer from hiking up the premium at renewal following a claim. But at least you won't lose your no claims bonus on top.

Making a claim does not automatically mean you lose your discount. It depends whether the claim is a 'fault' or 'not fault' claim.

This is not just a question of whether or not you were to blame for the accident, but depends on whether your insurer can recover all its costs from someone else.

For example, if you skid on black ice and hit a wall, your claim would be classed as 'Fault', even though you were not to blame, simply because your insurer can't recoup the cost of fixing your car from anyone else.

Where another driver is involved, unless it can be proved beyond doubt that the other driver was to blame, the two insurers will often settle a claim on a 50:50 or 80:20 basis. This means both drivers will lose some of their no claims bonus. With most insurance companies, you will lose two years of no claims bonus if you have a fault claim.

Be warned that it really is up to the insurer to decide whether to uphold your no claims bonus after a claim. It is unlikely that you will any contractual rights to reverse your insurers decision if you have made a claim and the bonus is removed. Indidivual insurers may be willing to listen so it can be worth a polite letter.

Making a claim

If your car is stolen, report it to the police first and then your insurer. You will have to wait a while because many cars are stolen by joyriders and later recovered.

If it is never found or is a write-off, then you may face another problem. Your car may have been in good condition with a low mileage, and the amount the insurer gives you may not allow you to replace it with an equivalent machine.

In that situation, get hold of a car buyer's guide - Glass's Guide is the most frequently used. If its tables support the insurance company, you'll find it hard to get a better offer, even if the car was in good condition.

If you have been in an accident and the other driver was uninsured, personal injury claims and some damage claims will be met by the Motor Insurers' Bureau. You can claim at www.mib.org.uk, or by calling 01908 830001.

This is financed by a levy on all insurance companies and was set up to compensate victims who would otherwise lose out through no fault of their own.

It will also pay out if you are hit by a driver who has bought insurance from one of the fly-by-night unauthorised companies that offer cheap insurance. If you find yourself in this position, tell the police.

Churchill car insurance offers free breakdown cover

Churchill car insurance is helping consumers to keep their costs down by offering free breakdown cover with each policy. 

All new Churchill car insurancecustomers who buy a policy before July 31 2009 will get free breakdown cover thrown in.

Drivers who are protected by Churchill's car insurance policy will not be left stranded if they should break down, as not only will they get roadside assistance, but rescue cover is also included. 

As the recession rages on, squeezing household finances, many are looking for ways of cutting back on their outgoings, and research has shown that insurance is sometimes on the first costs to be cut.

But, Churchill hopes that offering free car breakdown cover will encourage people to retain their insurance policies, because they might turn out to be more valuable than ever in financially difficult times when money is tight. 

Breakdown services and recovery home or to the nearest garage can be costly, but with Churchill car insurance it will be free, so cash-strapped drivers will not have to worry about how to pay for the tow truck. 

Commenting on the new offer, Tony Chilcott, head of Churchill car insurance, says: "In a recession, people should look for value and service. As a Churchill customer, any repairs undertaken by our repair centres will be guaranteed for five years and if you breakdown, a recovery operator will be with you in just under 30 minutes."

Car insurance from Churchill also offers named drivers the opportunity to earn their own NoClaims Discount, which, Mr Chilcott says, could be invaluable to households which are having to cut down to one car. 

Common Car Insurance Mistakes

When was the last time you checked out your auto insurance policy?

If you can't remember, it may be a good time to review your policy, because you may notice a mistake.

Insurance experts say there are some common mistakes that could cost you in the long run.

Without uninsured motorist coverage, officials say you will be required to pay for repairs out of pocket it you're hit by an uninsured driver or a hit-and-run driver. Keep in mind, uninsured driver coverage could raise your premiums by as much as 10 percent, but it may be worth the cost.

Also, if you're shopping for a new car, check with your insurance company before signing off on the deal. Things like safety features, reparability and even the likelihood of your dream car being stolen may affect your rates.

Another mistake is having an older car that you could be paying too much collision coverage. Also, officials say to make sure you check your vehicle's blue book value to see what it's worth.