What every consumer must know if they run into car trouble: Sarah Coles

I should say upfront that our insurer was great. They were efficient, straightforward, and they made a payment for our car within a week. Of course, it goes without saying that we were also left thousands of pounds out of pocket, and learned some key lessons the hard way. It’s worth me sharing some of the key points, so if you’re ever in this position, you avoid some of the most expensive pitfalls.

Make sure you know what to do in the event of an accident.

I had no idea. My first instinct was to call a car recovery service, because we were holding up traffic. In my defence I was in shock at the time. In fact, it makes sense to call the emergency services first – even if nobody is injured. The police will make the area safe and give you a reference number. Next, you need to call your insurer, who will get the claim started and recover the car. Depending on your cover, they may help you on your way too.

Get all the details you can, so the admin is as efficient as possible

In our case, in our initial conversation with the other driver, we didn’t get all the details we needed about the owner of the lorry. In any event, he was stuck by the side of the road with a flat tyre, so we could ask him all the follow-up questions. If you’re going to part ways, don’t be embarrassed to ask everything you can think of. It will save an awful lot of to-ing and fro-ing later.

Take plenty of photos too – including any vehicles involved, plus the road, its layout, and street signs. It’s better to take too many than too few. One of the most useful things I took was a random photo of the board in the café, which showed exactly where we were. It came in very handy when the insurer called two days later and asked again.

Understand your cover.

When you’re buying cover, you need to make decisions about what to include, weighing up options like additional legal cover, a hire car in the event of an accident and no claims protection. In most cases, there’s no right and wrong answer, you just need to understand the implications.

We’ve always decided not to pay for cover that means we can hire a replacement vehicle in the event of an accident. There are very few circumstances when we might need this, so it doesn’t make financial sense for us to pay for it. However, this was one of those rare circumstances – and even after getting an impressively cheap deal, we were £600 out of pocket.

Add your voluntary excess to your compulsory excess.

It’s not the first time I’ve been wrong-footed by an excess, so this is a lesson I’m clearly destined to learn slowly. I appreciate that most people know that if you opt for a voluntary excess like we did, it doesn’t replace the compulsory excess – it’s added on top. But if, like me, this information hasn’t stuck yet, consider this a reminder. That was an extra £150 we had forgotten about.

Check the documents, both when you first buy the insurance and if you renew.

This was our most expensive mistake. My husband changed careers a little while ago. He swears he told the insurance company about it, but when we renewed the cover with the same firm (it was cheaper than moving because we have a multi-car deal and a 17-year-old) he didn’t go through the renewal document to check they had the correct job title for him.

It meant we were technically underinsured, and the insurance company had the right to refuse to pay a penny. In fact, they calculated how much they would have charged for cover with his new job title, and the percentage by which we were uninsured, and then paid out that percentage.

Tell your insurer about any changes in your circumstances – and don’t hang about.

Unfortunately, my husband had earned three points on his licence a fortnight earlier, and not got around to telling the insurance company. He did try, but got lost in the mire of trying to talk to a chatbot and gave up. Again, the insurer was fair about it, and paid a percentage of the claim based on how much more the points would have cost us. However, it shows how vital it is to make sure you update these details as soon as possible.

Don’t assume it’s an alternative to emergency savings.

These two mistakes cost us over £1,500. That, plus the hire car, have come out of my emergency savings. You might assume that having everything from car and home insurance to life cover and income protection will mean you don’t need to worry so much about having savings to cover 3-6 months’ worth of essential spending to cover emergencies. Our experience demonstrates that this isn’t the case at all.

To make life even more interesting, my own car gave up the ghost a few days later, and all this has happened just before we’re set to move house, and start renovations. It feels like it might take another holiday to get over this one. We just might not pick a road trip this time.

House prices

There were a couple of house price announcements this week, with Halifax and the Royal Institution of Chartered Surveyors lifting the lid on how property fared in July. Overall, it was good news.

House prices in Britain grew 2.3% in the past year, which is the most positive this figure has looked for more than six months. Buyer numbers rose very fractionally, estate agents were optimistic, and Halifax now thinks we’ll get some modest price rises for the rest of the year.

However, it’s not all good news. The RICS figures showed the price of properties in newly agreed sales were down, particularly in East Anglia and Yorkshire and the Humber. Halifax also warned that affordability is still an issue. House prices have held up, and mortgage rates remain fairly high, which has pushed people out of the market. And while August’s Bank of England rate cut will improve sentiment, it won’t have a massive impact on mortgage deals.

The other potential fly in the ointment is buy-to-let sellers, who will be getting increasingly alarmed by speculation over capital gains tax rises. Some property investors will be worried enough to sell up before any potential change comes in. More forced sellers could keep a lid on house prices in the coming months.

SARAH COLESHead of Personal Finance and Podcast Host for Switch Your Money OnHeadline Money Press Team of the YearHargreaves Lansdown