Car insurance protects you and your family financially if you ever have a motor accident, be it your fault or not. Vehicle insurance is a necessary expense which all motorists must take into account. A car insurance policy will provide you with much needed protection against financial losses incurred because of traffic accidents.
Repairs to your own car after an accident, legal fees and liability for property will often not be covered by a bog-standard car insurance policy. You can buy additional options such as gap insurance, inconvenience cover, and legal protection can be valuable additions to your policy and could protect you against financial losses after an accident.
Choosing the right car insurance product will protect you, your vehicle, and other parties in the long run. You must prove that you have bought car insurance if you plan to drive in the UK. Your level of protection will depend on the type of car insurance policy you choose to take out.
WHY YOU SHOULD SHOP AROUND FOR NEW CAR INSURANCE
Shopping around for car insurance is very important for several reasons: • You may find better quotes • Depreciation will affect the value of your car • A change in personal circumstances • Your car finance may put your car at risk • You could find a policy which includes cover for loss of personal items • Some insurers may include breakdown cover • You may find inclusive legal cover offered by some insurers • It may be possible for an insurer to also cover a second car • You may be offered an introductory discount
Just because you have used the same insurance company or insurance broker for several years, does not mean you are getting the best deal. All it really means is that you have used the same insurance company or insurance broker for the past several years.
A good insurance broker is most likely to get you the best coverage if they manage your full insurance portfolio as they then know your history and needs. This is also the case with car insurance as they can often consolidate your insurance needs into an all inclusive package which most insurance companies only make available to brokers.
The value of your car will depreciate according to the amount of use as well as it's age. Your new car begins to depreciate as soon as you put the first few miles on the clock. For every year that you own a car it will decrease in value. You should therefore insure accordingly by adjusting your car's declared value at renewal time. This may seem obvious but people often neglect to do this. For this reason you should make sure that you have your assumed car's value checked against its current blue book value as opposed to against the purchase price. The reason is that even fully comprehensive car insurance policies do not cover a vehicle to the purchase price, but rather the blue book value. It is therefore important that this is what you declare the car's value as. Generally speaking, a more expensive car will cost more to insure. You may be lucky enough to find a policy which offers to replace your car with the same of similar following an accident, but this is not usually the case. There is however an insurance product called Vehicle Replacement Insurance which does just that! To find out more about how Vehicle Replacement Insurance works click on the link.
Your circumstances may have changed since you last renewed your car insurance. Perhaps you do not drive as far or often as you did, or perhaps your children have grown and want the keys to the car. Allow your insurance policy to reflect these changes by renewing accordingly. If you drive fewer miles your insurance company will recognise the decreased risk and your premium will be reduced accordingly.If you wait until renewal time it probably won't be that expensive to add additional drivers to your car insurance policy. By waiting until renewal time you may be able to avoid the administration costs of adding extra drivers.
WHICH LEVEL OF COVER SHOULD I CHOOSE FOR MY CAR INSURANCE?
There are three types of vehicle insurance in the UK.
1. In many countries including the UK, Third Party Insurance is mandatory. It gives you cover against a claim against you for damage to another car, its driver, or passengers should you be in an accident. Third Party Insurance acts as security against liabilities for damage to another person in a vehicle accident. This does not cover any damage to the vehicle or the driver of the vehicle. Third party insurance will not cover any necessary repairs made to your car.
2. Third Party, Fire and Theft Insurance will cover the benefits of third party insurance and includes any financial loss to the insured vehicle caused by fire or theft. The average driver may find this the best type of cover, especially for a vehicle which doesn't have a very high market value. A car which has been either leased or financed must have a fully comprehensive insurance policy.
3. The widest coverage is provided by a Fully Comprehensive insurance policy - or "fully comp". Damage to your car, and personal injury caused by an accident, as well as the basics of third party, fire and theft, are covered by a comprehensive car insurance policy. If the vehicle value is higher than the insured can afford to pay to replace it, then fully comprehensive is the preferred choice. There are specialised insurance products like Finance Gap or Vehicle Replacement Gap which can top up the gap between what your insurance company will pay out and the cost of getting a new car - you can find out more online by doing a simple search.
There are lots of factors affecting car insurance and most insurers offer secondary products which can meet any specialised needs of the policyholder.
FACTORS AFFECTING CAR INSURANCE
1. The Policyholder• Age of the policyholder • Gender of the policyholder • Are you married or single Rural or Urban • Engine and car size • How much your car will cost to replace • Any modifications that have been made to the vehicle by its owner
A younger less experienced driver will pay a higher insurance premium than someone with several years driving experience.
A married person is considered more responsible for their actions than a person is with no commitments. It stands to reason that a married man with children has more responsibilities and the insurance companies will therefore consider this person a lower risk than a single male in his early twenties driving a WRX.
Where a person lives also affects the insurance cost. Rural areas that have less traffic and areas with a lower crime rate will mostly likely get a better premium than towns or high crime areas.
A powerful car is more likely to lose control at the hands of younger drivers: expensive cars cost a lot to replace if scrapped and should they simply require repairs the sum of the replacement parts often costs more than the used car’s value, making more powerful cars very expensive to ensure.
Modifications are more likely to alter the vehicles safety; performance is improved, and handling may be compromised making the vehicle more unpredictable. The insurance company therefore sees these factors as an increased risk and will increase their premiums as a result.
2. Driver History • Years of driving experience • Previous claims • Any convictions for driving offences • Annual mileage
The number of years a person has been driving suggests their understanding of the rules of the road, shows the driver has built up experience of driving under varied driving conditions and has attained a certain level of confidence while behind the wheel. Certain assumptions and associated levels of risk are made according to the number of claims made in the previous five years. Most driving convictions negatively affect motor insurance premiums for drivers. Parking violations are not included.
Annual mileage is a factor too. The risk of having an accident increases the longer a vehicle is on the road.
3. Vehicle History • Current vehicle value • Whether you own the car or if it is leased or financed • Vehicle make and model • Performance level and size of engine • Modifications to the vehicle
If the vehicle has a low book value, it may not seem to be cost effective to pay for comprehensive insurance; however this is not necessarily the case. Often as the named driver with many years of no claims under the belt, fully comprehensive motor insurance could cost no more than third party insurance, but with additional perks. Buying car insurance online can mean including a range of additional benefits with only a small increase to your premiums. Fully comprehensive insurance cover will be required for leased or financed vehicles. This is so that they can be reimbursed for any damage caused to the car by the policyholder. Comprehensive insurance will cover this.
There may be other benefits included in your car insurance policy, which are not always necessary but sometimes advisable:
• Breakdown insurance • Courtesy vehicle • Roadside or breakdown cover • Help with legal fees and advice • Windscreen cover - repair or replace • No Claims protection • Compulsory or voluntary deductible amount
Choosing the correct insurance and getting the best quote can be daunting as there are so many variables to consider. Good websites make it easy to get quotes with little aggravation. It is a good idea to consider using an insurance aggregator website to get started. Online insurance aggregator websites are generally very easy to use. You only need to answer the questions once, and then they will select products to show you based on your answers. Once they have collected all the quotes, you will be able to compare insurance policies against each other, save and email your quote to your personal email address, go back and change your options to include or reduce the benefits you may be considering and - when you're happy - buy online. Before you commit to a purchase it's a good idea to first tell your broker the results of your search to see if he can get you a better deal. It's important to remember that you should compare like-for-like quotes when looking at different insurers. This is more difficult than you may initially think. Good luck.
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