How to Identify a Good Car Insurance Policy


In the UK, it’s a legal requirement that all cars driven on the road are insured. But with so many different car insurance options available, it can be difficult to establish which is right for your needs. Let’s take a look at what’s on offer, and what you should be looking for in a car insurance policy.

FCA regulation

The Financial Conduct Authority is in charge of regulating car insurers in the UK. Make sure that your choice of insurer is FCA regulated; that way you can be sure of a certain standard of quality. You might also look at insurance comparison from services like Which.

What features does it offer?

There are a few quality-of-life features that you might look out for from your insurance provider.

Your cover should give you cover for your windscreen, but ideally it should also cover your sunroof and windows. Make sure that you’re not restricted to a particular approved repairer.

Your personal belongings should be covered up to a certain value. Most of the time, there’s a limit of a few hundred pounds on the value of personal items covered.

If your keys need to be replaced, then your insurance should be able to cover it – but you might find that there are exceptions to this. If a friend or family member takes your keys without your permission, then this might not count as theft from the point of view of the insurer.

Is it specialised?

If you’re driving a particular sort of vehicle, then it makes sense to get specialised insurance that’s made to fit that vehicle. If you’re riding a motorcycle, for example, you should look into motorcycle insurance, as this will have policies dedicated to that vehicle.


If you have particular needs, it’s worth thinking about the extra features that might make all the difference to your experience.

If you’re spending a lot of time driving abroad, then you should make sure that your policy provides the same level of cover for overseas driving as it does for domestic driving.

If you’ve got a child seat in the car, then you might think about covering it against accident, fire or theft. That way you worry about having to shell out for a new one.

The quality of your courtesy car may vary dramatically depending on the type of policy you’re going for. In some cases, you might be alarmed to find that you don’t actually get a courtesy car at all! For the avoidance of disappointment, it’s worth clarifying these things before you invest in the policy in the first place.

If you’re using your car to travel long distances, it’s also worth looking at hotel expenses. These will cover you for accommodation in the event that you can’t get home following an accident.


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Watch My Wallet has everything you need to know about money, written by real people who’ve been there. Inspired by the philosophy of Early Retirement Extreme (ERE), our goal is to make informed decisions about our finances in order to achieve financial independence.