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Official reports might say that we’re definitely out of the recession but for many people the sting of the economic downturn won’t go away for a while. As a result it’s become increasingly important to squeeze every penny, especially for the usually expensive necessities like car insurance. Even though our car insurance on average is less than it was last year, it’s still higher than most are comfortable with, so people are always looking for a cheaper deal. Is this the best tactic? Does a low price go hand in hand with a low quality policy, and would you be better off spending a few extra pounds to get a better deal?

No claims bonus protection

This is something that is usually part of the hard sell when you buy or renew your car insurance policy, and because of that some will flat out refuse it without giving it the time of day. However, it can be a useful add-on to save you money in the long run. If you make a claim, your No Claims Bonus (NCB) is usually reduced by 2 years. The reduction of this NCB will cause your premium to rise on your next renewal, but if you protect it you’ll keep the same about of NCB even if you make a claim. In this instance, paying a little extra for the protection could save you a lot more by keeping your bonus intact.

All-in vs. third party

There are two basic kinds of car insurance policy – third party fire and theft (TPFT) and fully comprehensive (there is also Third Party Only – TPO – but this is very uncommon). If you’re involved in an accident, TPFT only covers damage to the other person’s car, whereas comprehensive also covers repairs to your own vehicle. Generally, this extra level of cover means that you’ll have to pay more on your premium, but the extra that you have to pay is likely going to be less than the amount you’d have to hand over if you had to fix the car yourself.

Whistles and bells

These are those optional extras that they try to sell you when you take out your policy. They vary between car insurance companies, but the usual suspects are breakdown cover, car hire and personal injury cover. Again, many people decline these without a second thought, but depending on your circumstances you might want to reconsider, as they could be worth the extra cost.

Breakdown cover

If you’ve a partner or a family member who can help you out if you break down, then you might not need this. However, if you get stuck it could be really handy to have cover no matter where you break down.

Car hire

If you’re a businessperson or commute long distance this might be very useful if your car is in for repairs following an accident. Not as useful if you only use your car to nip to the shops.

Personal injury cover

Most comprehensive policies have some form of this already in place, so it might be superfluous to your needs. Always check with your insurer about exactly what you are getting.

So in most cases, paying that extra little bit can pay off if it means giving yourself a better degree of cover and a better policy all round. Just be mindful of what it is you’re buying and always keep looking for a better price.

Jamie Gibbs is the resident blogger for multi car insurance quotes comparison site