Car Insurance

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Car Insurance

In the UK, car/motor insurance is compulsory for any person intending to drive or operate a motor vehicle and should not be neglected.

Insurance policies range from the basic 'third party' to 'fully comp', but shopping for the right policy at the right cost from the right provider can prove to be a very long and overwhelming challenge.

Luckily the internet can save a lot of time and hassle as it contains hundreds of car insurance search tools and comparison sites that allow you to compare car insurance quotes from a wide cariety of car finance companies.

Types of Cover

It is illegal to drive in the UK without insurance and therefore the minimum standard of cover you can take out is 'third party', which covers:

• Liability for injuries to others, including passengers.
• Liability for damage to someone's property.
• Liability of passengers for accidents caused by them.
• Liability arising from the use of a caravan or trailer while attached to the car.

After 'third party' comes 'third party fire and theft' which is similar to 'third party' with the addition of a payout being made if a driver's vehicle is stolen or set on fire.

A fully comprehensive car insurance policy is widely regarded as the 'top of the range' policy and will payout for all of the areas covered by third party fire and theft with the addition of paying for any damage to your own vehicle regardless of who caused the accident. It also covers loss of, or damage to, personal effects in the car.

Business car insurance, also known as 'commercial car insurance' meets the needs of small businesses with company vehicles.

Though polices vary between individual car insurance companies, benefits generally include a courtesy car, free cover for driving in Europe and, in some cases, legal aid as long as your are not at fault for the accident.

Making a Claim

Before making a claim, ask your insurer if in the event of a theft, whether your insurance includes cover for personal belongings or replacement locks and will they immediately authorise repairs from recommended agents. It's also worth checking whether a courtesy car is included in the price quoted and for how long so that you can make necessary preparations.

Most car insurance companies will have a claims helpline that generally operates for most hours of the day. Adding roadside assistance into your policy will give you access to emergency help lines that operate 24/7.

It is important to be honest when answering all questions that your insurer may ask. Do not give any false information as it will, more than likely, come back to haunt you.

Costs

When it comes to deciding which policy is most catered to your need and what benefits are right for you it can often help to understand the perspective of the car insurance company. There are certain factors that will contribute highly towards the cost of your policy such as:

• Age and gender – Younger drivers and learner drivers are less experienced and therefore considered more likely to be involved in an accident. Women are now offered lower premiums by an increasing amount of companies, as statistics prove they are less accident-prone than men.
• Insurance Group – Most cars are given an insurance group ranking based on the level of risk involved with each car type and group (often based on likely repair costs). High-powered performance cars will generally be in the highest group (up to group 20) whereas a small car will be generally lower ranked and therefore should receive cheaper car insurance.
• Cost of vehicle – If you drive a classic or performance car you can expect to pay a higher premium as these cars generally cost more to repair and maintain than others.
• Engine size – Generally, the more powerful the car, the more likely it is to be involved in a high-speed accident.
• Your location – if you happen to live in an area deemed to have a high crime rate or high density of traffic then you can expect to pay more as your car will be classed as more susceptible to a theft or an accident respectively.
• Your history – If you have been involved in previous accidents then your cover will be more expensive.

Cutting Costs

These are just some of the ways to reduce your premium and get a more competitive quote:

• No claims bonus – The longer you go without making a claim the better, as you will be building up your 'no claims bonus' (sometimes known as 'no claims discount'). In some cases a five-year no claims bonus can save you as much as 65% on your premiums.
• Excess charge – Many companies issue policies that have a 'compulsory excess' (and sometimes a 'voluntary excess'). This is the amount of money you are willing to pay in the event of an accident, e.g. if your excess was £100 and the total cost of repairs was £300 then you would pay £100 and the insurance company would also pay £200 but if the cost of repairs was £100 or lower you would pay the total cost. The more money you're willing to pay as excess, the lower your premium will become.
• Car security – Installing security (alarm, immobiliser or tracker) can reduce the cost of your premium, as it will lessen the likelihood of it being stolen.
• Young drivers – Adding a parent to your insurance, or an older, more experienced driver, can reduce costs.
• Parents – The addition of one or more teenagers to your policy can significantly increase the cost of your policy.
• Modifications – Alloys, bumpers, window tints, racing seats, colour changes and adding a spoiler are all modifications that could deem you as a ‘boy racer’ and add to your premium.

Shopping around

Call centres and busy high street dealers can make searching for car insurance policies a long and tiring process. Thankfully the internet has made shopping around more simple and efficient. In addition, some insurers will offer as much as a 20% discount to people who buy their car insurance online, plus there is now a wide range of comparison tools available online to help you pick the most suitable deal.

When researching and buying car insurance there are four main options:

• Insurance Brokers – Aim to deliver the customer choice by utilising their computer systems, but can only present the insurers with whom they have deals.
• Direct Insurers – Cut out the middleman as commissions paid to brokers can be saved if the insurer gives the benefits to you. Include: Direct Line, e-Sure, Admiral, Hastings , 1st Alternative, Churchill, Privilege, MoreThan and Elephant.
• Branded Providers – Established names who have added insurance to their extensive list of products, including: Tesco, Virgin Money, MBNA, Sainsbury's, Marks and Spencer and the Post Office.
• Full Search Provider – A full search provider provides you with a full search of the market that includes a list of potential car insurance providers.