Common car insurance questions answered - Part 1
Sarah Rigney
Staff Writer

This is the first part of our guide series on common car insurance questions answered. We review the most common car insurance questions asked by motorists looking to take out cover.

Reviewing car insurance policies can leave motorists with many unanswered questions. At we are here to dispel any confusion by answering these queries.

In our 2-part FAQ guide, we address the most common questions people are asking. In this guide, Part 1, you will find the answers to more general car insurance queries related to your no claims bonus, making a claim, and how your car insurance is calculated. 

In Part 2, you will learn about classic car insurance, the impact emigration has on your premium, and if you can get insurance on an imported vehicle, to name a few. 

This guide is also the fourth in our eight-part series on taking out car insurance on You can find the rest of the guides in this series linked at the end of this article.

1. How is the cost of car insurance calculated?

When looking for a car insurance policy, there are several factors taken into consideration.

Experience: Usually the less driving experience you have, the higher the insurance premium. Whether you are driving on a full or provisional licence makes a huge difference to the cost of car insurance. If you’re new to driving, take a look at what to know if you're taking out car insurance as a first-time driver.

Age: Both younger people, aged 25 and under, and older people, aged 65 and over, are considered high-risk by insurance companies. As a result, they’re likely to pay more.

Claims history: Whether you’ve made a claim or been insured without incident before will be considered. Insurance becomes less expensive with experience and a clean driving record. 

Where you live: Insurance companies will factor in whether you live in an area with a high crime rate, or whether you can keep your vehicle in a garage or driveway at night.

The size and age of the car: In general, the smaller the car and the engine, the cheaper it is to insure. Usually, faster cars with more powerful engines cost more to insure. Similarly, the older the vehicle, the more difficult it is to insure.

Vehicle value: A new car is more expensive to replace than an old vehicle and will cost more to insure.

Your occupation: Often those with jobs that are deemed more high-risk will pay more for their car insurance.

Excess: This is the amount you volunteer to pay in the event of an accident. The higher the excess, the more your car insurance can be.

2. Can I be insured on more than one car?

It’s possible to be insured on more than one car. You can either take out a separate policy for the second car or take out a multi-car policy.

Multi-car insurance covers more than one vehicle under the same insurance policy. The features are the same as a single-car policy, but with the added benefit of a discount for the second vehicle. Multi-car insurance usually allows you to cover up to five vehicles registered at the same address.

It’s important to always compare both single-car quotes and the cost of multi-car insurance policies to see which may work out as better value.

3. What is a no claims bonus?

A no claims discount or bonus is a reduction in your car insurance premium based on the number of years you’ve had an insurance policy and not claimed on it.

Most insurers have a maximum limit on the number of years, usually 5 or 6, that you can avail of a no claims bonus. This means that your no claims bonus does not increase any further after six years as this is the maximum discount, even if you’ve been claim-free for longer.

4. Can I keep my no claims discount if I change provider?

You should be able to transfer your no claims discount to your new insurance company. The insurance company will require a No Claims Certificate from your previous insurer.

Usually, this certificate is included in your renewal pack from your previous insurer. If you don’t already have this you can request it from them.

5. What is a no claims bonus protection?

When getting insured, a straightforward way to safeguard your no claims bonus is to include no claims bonus protection as part of your insurance cover for an additional fee.

With no claims bonus protection, you won’t lose your no claims bonus if you make a claim or if one is made against you. There are some exceptions to this rule called ‘exclusions’ or ‘limitations’. Check your policy to learn more about these.

Having protection for your no claims bonus doesn’t mean there won't be repercussions if a claim is made against you.

6. What is step-back bonus protection?

Step-back bonus protection is slightly cheaper than full no claims protection. This covers part of your no claims bonus, meaning you won’t lose all of your no claims discount if you make a claim or if one is made against you. However, you will lose part of it.

The amount of your bonus that you lose depends on what’s called the ‘step back rate’ and will be outlined in your insurance policy document.

The step-back rate is usually calculated as a percentage, representing the discount in years to be deducted. Most insurers will apply a step-back rate of 30% (three years) on a no claims bonus, which means three years will be deducted from your discount if a claim is made.

7. Can my no claims bonus expire?

Your no claims discount usually remains valid for 2 years from the last date on which your car insurance policy was in place.

If you’ve been abroad for less than 2 years, your no claims discount will still apply if you decide to return. 

8. Can I drive someone else’s car under my insurance?

Being able to drive someone else's car under your own insurance policy is a handy benefit to have, particularly if your car unexpectedly breaks down.

Often if you have comprehensive cover, you may be insured to drive another car. If it's not included as standard it may be possible to add it on for a small additional fee. Similarly, your policy might allow others to drive your car.

If in doubt, always check with your insurer before getting behind the wheel of another car.

9. Should I make a claim or pay for the damage to my car myself? 

If you find yourself in the unfortunate situation of being involved in a road accident, you’ll be faced with the decision about whether or not to make a claim for the damage incurred or to pay for it yourself.

Before making a decision, consider the following:

  • The damage: Often smaller bumps and scratches can be cheaper to fix yourself. However, if the damage to your car is substantial, it may be more affordable for you to claim than paying for the repairs yourself.
  • Premium increases: Making a claim will cause your premium to go up in the future. There may be exceptions if you’ve had to claim on your windscreen or lost keys, as often these are seen as being separate to your main car insurance policy. 
  • No claims bonus: If you make a claim, you’ll lose your no claims bonus. It’s worthwhile calculating how much of a discount you currently get, and seeing how this would be impacted.
  • Your excess: While upping your excess will help reduce the price you pay for car insurance, this will also mean that you’ll have to pay a hefty excess fee in the event you make a claim. You may find that the repair costs are less than your excess, so making a claim might not be worthwhile.
  • The claims process: The claims process can often be complicated and extensive, so you must consider whether it’s worth the time and hassle.

10. I have just purchased a new car. How do I change this over to my existing policy?

This is referred to as a mid term adjustment (MTA). If you purchase a new vehicle you must call your existing insurance provider to inform them, and they will change the vehicle over on your existing policy. 

It’s important to note that for this change, there may be an additional charge on the premium, a refund due to you, or no extra cost incurred. This will all depend on the type of new and its risk details.

Take a look at Part 2

In this guide, we answered just some common car insurance questions. Don’t forget that you can find an additional list of questions and queries in Part 2.

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Simply head over to our car insurance service page and provide us with some information on your car, and your driving history. 

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Check out our car insurance guides

If you found this guide helpful, make sure you check out our other guides in our series on taking out car insurance on

To learn more about car insurance, take a look at our insurance blogs and guides pages.

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