In the UK you must be insured, by law, if you are the owner or driver of a car, van, motorbike or lorry. Finding insurance can be quite a daunting prospect as there are thousands of different companies to choose from, jargon to understand and different types of policies. Here are some helpful tips and advice to make the process of getting and understanding car insurance a little simpler.
Types of Policy
This is the minimum insurance you can buy. It provides cover if you injure someone else or damage their property in a motoring accident. If you or your vehicle is injured or damaged, you will need to cover any costs by yourself.
Third Party Fire and Theft
Some companies will offer this type of cover as the minimum available. It provides protection if you injure someone else or damage their property. It also provides cover if your vehicle is stolen or burnt. If, however, your vehicle is vandalised or involved in an accident you will have to cover the costs yourself. This may be the most appropriate cover if your car is not worth very much.
Covers injury to someone else, damage to their vehicle, damage to your vehicle from theft or fire, plus accidental damage. There is also some cover for items stolen from your vehicle, medical expenses and personal accident protection. These will vary depending on the insurer.
You need to decide on the type of policy that is most appropriate for you. Comprehensive insurance is the most expensive, but will cover your vehicle for accidental damage, so in the event of a crash you do not have to pay out to repair your car. Most comprehensive policies include the transportation of your car to a garage for repair.
There are other factors that have an effect on the cost, such as…..
- Type of Vehicle- Performance cars are the most expensive to insure as they are most likely to be stolen or broken into.
- Area- If there is a lot of car crime in the area this will raise the cost.
- Occupation- Students and young people are the most expensive to insure, as they are most likely to have accidents. It may be best to go to a broker or company that specialises in insuring young drivers.
- Parking- Your car is more likely to be stolen or broken into if it is parked on a street instead of a driveway or garage.
- Age/ Driving experience- The basic rate is for 30-49 year olds. If you are outwith that bracket it may be cheaper to go to a specialist insurer.
- Previous Convictions- For motoring offences, such as a large accident history, will raise the costs.
Cutting The Cost
It will reduce your premium if you simply restrict the amount of cover, such as limiting the number of named drivers (keep to partner/spouse) and raising the excess (part of a claim that you pay for). A security device will also lower your premium, the minimum is a Thatcham 2 device.
This is the number of years that you have had insurance without making a claim. This usually means a reduction in your premium (price of policy) of up to 65% depending on how many years you have. You lose this bonus when you make a claim, unless the accident was the fault of another party, in which case your insurer should be able to recover the costs from them and you retain your bonus. If you have a number of years no-claims then claiming may result in a reduction of your bonus, rather then losing it completely.
This is the first part of the cost of a claim that you pay for. For instance, you are involved in an accident and make a claim for the cost of repair. You will be required to pay the first £100-£300 of that claim, depending on the agreed excess on your policy. You can often volunteer to pay a higher excess, if you are trying to reduce your premium. However, you must remember that you will be required to pay this amount in the event of a claim. There is often also an excess on windscreen cover, where you have to pay the first £50 or so of a replacement windscreen. Check the details of excesses for each policy.
If you want to go abroad with your vehicle, then a Uk insurance policy will provide the minimum legal cover required for European Union countries. If you want to be covered for theft, accident or damage then you will need to take out additional cover. This is provided by most companies at an extra cost. You must always tell your insurer if you plan to take your vehicle abroad. This should be done in advance, as not all territories will be listed and your insurer may have to order a green card.
- Shop around. Don’t decide on the first reasonable policy you find. Go to a variety of different brokers for quotes. You can do this by telephone or online. Many companies offer a discount for insurance purchased online.
- Always check the small-print of any policies (courtesy car, EU cover, protected no-claims, extent of cover)
- Be ready with details of you and your vehicle. Brokers will ask a number of questions including car make, model and registration number. They will want to know your estimated annual mileage, where your car is kept, your occupation, the type of cover you want, any previous motoring offences (when they were issued, what type) and any no-claims bonus you have.
- It is helpful if you have a few quotes to hand, as you can then ask the broker if they can provide a more competitive price. Many will ask you what you have previously been quoted and see if they can find a better quote for you.
- Always inform your insurer of travel abroad with your vehicle and any accidents (even if you do not intend to make a claim).
- Have a security device fitted.
- If you are a young driver, it will pay to look at brokers who specialise in insuring young drivers.
- 80% of personal injury claims are for whiplash injuries, so adjust your headrest to support the base of the skull.
- Where possible, give yourself plenty of time to find a good broker and policy. You are more likely to pay above the odds when you are in a hurry.