1. First, decide on the cover you need; comprehensive, third party property or third party fire and theft (now rare). Then shop around and compare the premiums, excesses and conditions of several companies.

2. Ask about no claims, free legal, windscreen and stereo cover. Ask also about conditions (such as alarms and immobilizers), exclusion clauses and special restrictions

3. Read the fine print, making sure you understand what the policy covers you for, and in which circumstances. Also be aware of changes to policies at renewal time.

4. Cooling off; Remember, you've have 14 days from the date you receive a policy to cancel it and receive a refund.

5. Be honest with questions (Including driving history and modifications) If you are not, you have failed in your 'duty of disclosure', your cover may be compromised and claims refused.

6. Tell your insurer about changes in your circumstances that may alter your premium, these may include; modifications, driving convictions or a new address.

Your 'duty of disclosure' comes down to this; You are paying good money in order to be covered for certain risks. So, make sure you are covered, don't give the insurer the opportunity to refuse your claim… tell them about anything that may affect their decision to accept your risk and put a price on it. This may mean giving additional information not asked in the application. After all, if you pay out a fortune in premiums only to have a claim knocked back, you've wasted your money.

Insurers also have duties, these include; giving you a copy of the policy in clear, unambiguous language, disclosing restrictions, settling claims quickly and having a genuine reason to refuse claims. In addition, insurers must send a letter telling you that your policy is about to expire. If they don't, and you have not taken out another policy, you are still covered.

Finally, what if, after fulfilling your duties, you have a claim refused?
Firstly, ask your insurer to identify the policy clause on which they base their refusal. Then, if you do not believe there is a genuine reason, seek an internal review from the insurer and ask for a "final decision" letter. If you are still not satisfied you have 3 months to go to Insurance Enquiries and Complaints (IEC). IEC hears refusal to pay disputes concerning motor vehicle and other forms of insurance (except compulsory third party), phone them on 1300 363 683.