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Which very cheap car insurance policy is the best one for you will depend upon just what you want it for.

If you drive a cheap car, that has just about got through its MOT test and will not cost you a lot to replace, then you may just want to just get your car street-legal. One upon a time a third-party policy would have been enough. If you had an accident which was your fault the insurer should pay for any damage or injury you caused to other people, and you'd either fix your your own car yourself, or scrap it and if someone stole it you'd just shrug your shoulders and buy another one. The problem is that third party insurance now is often even more expensive than comprehensive cover! This is because so many people who took out the very cheapest policies they could find were younger people with little driving experience and those with little money to spend on maintaining and protecting their cars. Result: higher than average claims and so increases in premiums. Get quotes for third party only if you wish, but don't expect them to be a bargain.

You probably have a vehicle which is at least half decent and which you want to protect. A third party fire and theft policy should at least cover it if someone stole it, or it set on fire (subject to certain conditions, as you will read below), but otherwise you would need fully comprehensive cover, at the cheapest possible price.

The problem is that in this world you usually get pretty much what you pay for, and if a particular policy is extremely cheap there will almost inevitably be a good reason for it. There will be two things you will have to look out for; firstly, just what does it cover; and secondly, in the event of an accident, just how much trouble will you have making a claim. There are a number of cheap insurers out there, but if you look them up on Google you will find that far too many of them have a dreadful reputation for trying to wriggle out of paying on claims. We do of course have an insurance ombudsman who people who feel they have been unfairly treated by insurance companies can turn to, but there are quite a few insurers selling policies in Britain who are based in Gibraltar. Gibraltar does not have an ombudsman scheme and although these insurance companies can voluntarily agree to join the UK one we do not know of one single company that has done so. Therefore, if you have a policy with a Gibraltar-based insurer that refuses to pay out, you could well find yourself having to go through a long and expensive process to try to force them to pay; and you could well find that because the policy, which forms the contract between you and the insurer, contained get out clauses in their favour, that you lost your case anyway. You may feel that it is worth paying that little bit more to a British-based company, in order to have that extra protection.

How middlemen push up the cost of your policy

There is usually no set price for a motor insurance policy. This is because the underwriters ask for a certain price, and then extras are added on by whoever sells it to you; usually a broker. Many of the 'insurance companies' in Britain are in fact brokers and not insurers; companies like the AA, RAC, Budget, Halifax, Churchill, Privilege are all brokers. To make things more complicated their products are then sold again by other brokers or through price comparison websites; all of whom take a bite out of the cherry. By the time the poor motorist pays the inflated premium several companies get a slice of the action before the money is handed over to the people who actually underwrite the policy! fortunately selling motor poplicies is a cut throat competitive business so there are bargains to be had, provided that you know where to look.

Using price comparison websites

Most vehicle insurers and brokers have special offers from time to time, and sometimes these are quite generous. The problem is that there is no way of telling when they will be available. This is another good reason to use a price comparison engine, because it will get you quotes from a very large number of insurers which should include their latest offers.

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