Welcome to Cheap Car Insurance - Information on Aa car insurance online quote

IF YOU like conspiracy theories, you will love this one. A sources claims insurance companies routinely crank up premium costs every year, not because they have to, but because they can get away with it. They rely on our laziness and ignorance to stick with the same company for another year and not shop around.

It seems many of us have little understanding of how motor insurance operates and how we can get the best deal. So here is your crash course (pun intended) in getting better cover.

In case you did not realise there are four levels of insurance: 1. Road Traffic Act is the minimum amount of cover which insures you against injury to another driver only, not property. It is used for bad risks; 2. Third- party covers damage you do to someone else and their property; 3. Third- party, fire and theft. As third party it also includes damage by fire and the car's theft. 4. Comprehensive covers most of the damage resulting from an accident, which may include, tow charges and hire of a replacement vehicle.

So how do insurance companies set the cost of your premium? Contrary to popular believe they do not just think of a random number then double it. Four main factors that will affect your cover are:

1. YOUR CAR Is rated on a scale of one to 20. Obviously, the higher the group the more expensive it will be. The group is based on the cost of repairing the car, its acceleration and top speed. Generally the older the car the cheaper it is to insure, because insurance companies are more inclined to write it off. Security devices such as immobilisers and tracker systems help get a discount and may be a requirement of cover. Older or cars may be eligible for cheaper "classic" insurance on the grounds that it will be looked after better.

2. YOUR HOME The more densely populated the area the higher the risk of theft or an accident, possibly 50 per cent more in a city compared to a rural area. Some postal codes have a worse rating than others. A garaged car is always cheaper to insure.

3. USE Always be specific about who will drive the car. Several rivers and specifically business use will push up the premium. If your car is not used much a limited mileage policy can be agreed.

4. YOU Insurance companies like their clients to have steady, office- based occupations. For instance, they regard journalists, scrap-metal dealers and market traders with suspicion. They may even choose not to insure a DJ, athlete or entertainer. Insurance gets cheaper as you get older and under-25s are charged the most. Over 50? Good news, you are less of a risk so you pay less. A clean driving record is good and insurance companies mostly overlook the odd speeding conviction, but not a drink/drive one or disqualification.

It is important to read the small print and even more important to understand the contents of the policy document.

EXCESS A voluntary and also compulsory amount that you pay, an agreed sum in the event of a claim, say, the first pounds 100. The higher the excess, the

lower the premium.

NO-CLAIMS DISCOUNT Building a claims-free driving record means the cost of the policy will be reduced each year until the discount reaches 60 per cent. This bonus can also be protected for an extra amount, in the event of a claim.

AGREED VALUE If you have a 1974 Mini that gets nicked, you will be paid out on the basis that it is a 1974 Mini with an MOT, so you might get pounds 150. Unless the insurer knows how valuable it is to you, because you have spent pounds 4,000 on the restoration, it is essential to agree the value. Photographic evidence is usually required.

MODIFICATIONS Anything which has changed the appearance of a car - tinted glass, alloy wheels - is going to make a difference simply because the car is more eye catching. The risk is assessed on the increase in value, what those extras cost.

Insurance companies will ask what the power increase or decrease is and place a value on that uprate rather than get involved in the minutiae of the specification. Some may require an engineer's report.

Every tweak, however minor you may think it, will affect your premium and if you cover up, the ability to make a claim could be severely hampered, so be warned and be honest. So how can you get a better insurance deal? You must to invest time on the phone and internet. On the plus side, many numbers will be freephone ones. Contact brokers and direct insurers

BROKERS operate between insurance firms and you, the policyholder. They are not necessarily more expensive than a direct insurer and can be more flexible in placing a special risk for Minis like ours, or simply finding the right insurance company for you.

DIRECT Insurers are competitive and can often specialise in certain kinds of customer, such as mature ones.

SPECIAL POLICIES These are available for drivers in particular professions, and owners of well-preserved vehicles.

If you are a civil servant, the CSMA will be able to help. Ask you trade or professional body if they have any arrangements with major insurers. You can be sure that your national Mini club has a discount scheme.

Under this category also come classic-car policies (mostly for cars more than 15 years old), where account is taken of how cherished the vehicle is and that the mileage is likely to be restricted annually (say, 5,000 miles).

`You have to shop around to get the best quotes'

INDEPENDENT READER Sarah Jewell, who lives in London, was alarmed to be told by AA Insurance that the premium on her Peugeot 406 LX estate had shot up from pounds 490 to pounds 820.

That was surprising because she had full no-claims, no driving convictions and the car was parked off-road on a drive.

We tried several approaches. Online quote finder www.autodirect.co.uk had an easy-to-use site and they produced four quotes that ranged from pounds 748 to pounds 969.50. Then we tried www.moneyextra.com which generated three quotes, from pounds 689.85 to pounds 804.32 so immediately we were starting to reduce the premium price.

The reader then phoned Norwich Union, managed to speak to a human and found a quote of pounds 600. She is now a happy lady.

CHECKLIST

v Get at least 10 quotes based on exactly the same requirements and compare the cover and additional benefits on offer, whichmay include free windscreen replacement, or even membership of a rescue organisation.

v Ask for written details of the quote so you can examine the small print and look for hidden excesses, or policy restrictions.

v Price is, of course, important, but remember that the whole point of insurance is not only to protect yourself, but also to protect a valuable asset. So weigh up the extent of the cover with the price offered.

v Shop around for the best quote and cover.

v Restrict the number of drivers and or mileage.

v Garage your car.

v Read the policy and the restrictions carefully.

v Do not choose the policy purely on price.

v Do not take liberties with the restrictions.