Brace yourself for the surge of new-style car insurance policies about to hit the high street. Leading the charge is supermarket giant Tesco, with its new low-cost “no frills” option. And where one company leads, you can be sure the others will rush to follow with their own “bargain basement” policies.

So how do other insurers rate the new policy? According to Norwich Union, Tesco have found a gap in the market for simple, nuts-and-bolts cover with no added extras. Applying the results of their own two-year study of 5000 motorists, they are hoping that their new policies are just what car drivers are looking for. The AA are less enthusiastic about the new version: shop around, they say, and the traditional fully comprehensive can be found for same price, but without the high excess.

With both insurers keen to gain new clients and keep their places at the top of the “Best Buy” league, the resulting competition will be one to watch.

So, how do these policies compare to traditional insurance?

Tesco have brought out a “hybrid” insurance giving more cover than a basic third party policy, but less than the more common fully comprehensive. Let’s take a closer look: no courtesy car if your own is off the road, young drivers are not eligible, and the excess is a whopping £475. There is no protection for your no-claims discount, and any repairs your car might need have to be carried out at designated garages only. Unlike the normal three year guarantee, there’s a limit of only 12 months on any work they carry out. Cover can only be bought online. But, if you don’t mind the restrictions on the pared-down policy, it comes in at 12% less than Tesco’s standard cover.

Spotting a gap in the market, Norwich Union are offering a policy specifically designed for young drivers. Existing customers’ driving patterns are monitored and charges scaled to fit. Each time a client drives between 11pm and 6am, they incur a £1 charge – research shows that young drivers are more likely to be involved in an accident at night. At present, the policy cannot be provided for new customers.

Keen not to be left behind, Direct Line are bringing out their own low-cost range, and It will only be a matter of time before all the major companies follow the trend.

Confusing? Consider what the new policies don’t cover, as well as the lower prices. Simply put, you can have cheaper fully comprehensive cover, if you don’t mind losing some of the added benefits of traditional policies such as a lower excess. Look around online, and it’s easy to find a car insurance broker who will be able to offer a tailor-made policy suited to exactly what you require. If you know what you want, finding a bargain is easy, and the company will even research the cheapest deal for you free of charge.

Older drivers are still at a disadvantage when it comes to insurance costs. With Government plans to introduce regular eye tests, along with other medical checks to be carried out three-yearly, driving in your older years could become prohibitively expensive. Charity Age Concern wants tests of driving fitness to be based on ability, not age, but the Association of British Insurers want mandatory tests based on a set period. Old age, they say, can slow the reflexes and eyesight can deteriorate, meaning that elderly drivers are at higher risk of accidents. According to the Association, the rate of serious or fatal accidents rises after middle age, with more accidents of all kinds per mile driven. Passengers and other road users are also all at higher risk.

After the age of 60, car insurance premiums start to get higher again as underwriters become wary of taking on new clients. Here’s a typical scenario from the AA: a 21 year old woman, paying £326 as a new driver, will qualify for a much reduced cost of £197at 60. Should she choose to drive at 80, however, the premium will have risen sharply to a sky-high £460.

But all is not lost; there are specific policies tailored for the older driver. With the retirement age set to rise and people expecting to enjoy a more active old age, there is clearly a need for better insurance for the elderly. Age Concern, Saga and Help the Aged all offer their own specially designed policies. In fact, there are more options every day – contact an online broker and they should be able to give you all the most up-to-date information you need.

It’s your policy – shop around, and make sure it’s giving you what you want as well as what you pay for!

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