How to choose a good car insurance

Tt is a legal obligation to have car insurance, unless your vehicle is declared SORN (off the road) but how do you know you are buying the best policy for your needs?

There are three levels of insurance cover for motorists:

Third party insurance, the legal minimum cover, only covers damage to other people, so if your car is stolen or in an accident you must pay for the loss/damage yourself. It is not necessarily the cheapest option, but it may be the best if your car is worth less than £1000, if you have no no-claims bonus, or if you live in an area with high levels of car crime.

Third party, fire and theft is the next step up. With this level of insurance, you are covered for theft and damage by fire.

Fully comprehensive does what it says: you are covered for loss, theft and damage caused by an accident, even if you cause an accident yourself. This level of cover is usually the best value for money. The price will be affected by the level of excess you choose to pay in the event of a claim, and also by the no-claims bonus you have accumulated. The longer you go without making a claim, the higher the level of the no-claims bonus. Some policies offer protection for no-claims bonuses.

To get the best value for money, review your insurance regularly and be prepared to change insurers. Use an insurance comparison site such as MoneySuperMarket, and check the small print carefully to be sure the policy meets your requirements.