All vehicles driven on public roads in the UK are required by law to have some form
of car insurance. However, there is enough choice on the market these days to make
it easy for anyone to find an insurance policy that suitably covers their vehicle.
Whether their car's a classic or high performance one there will always be an insurance company
ready and willing to sell an insurance policy for it.
In general, though, the majority will be looking to buy standard car insurance from one of the
many insurance companies that offer it in the UK today. Being well briefed on the insurance
policies these companies offer will assist in making more informed decisions, and possibly
result in getting cheaper insurance deals as well.
To begin with there are
three main types of car insurance policies that are routinely offered to the consumer: Third
Party Only Insurance, Third Party Fire And Theft Insurance and Fully Comprehensive Insurance.
The latter two tend to get shortened and are often referred to as "Third Party"
and "Fully Comp".
Third Party Insurance
The very minimum required
by law in the UK is Third Party Only, and fortunately this one is the cheapest of the
three options. Because of this Third Party Car Insurance is often the first time buyers
choice as it's relatively cheap yet still allows the driver to fulfill their legal obligations
on the road.
Third Party Insurance will usually cover your liability for injury to others
(including passengers), damage to property, and liability whilst towing caravans and trailers.
Third Party Insurance will not cover you for accidental damage to your car, therefore if
you have an accident you will have to meet the cost of repairing it yourself. You can,
however, claim on the other persons insurance policy if it is proved they were legally
liable for the damage.
If your car is new or you have a lot invested in it then
it can be deemed a valuable asset, and Third Party Insurance will rarely be sufficient
to protect this asset. For example, if the car was stolen then Third Party Insurance would
not cover the cost of replacing it, so in effect you would have lost every penny you had
ploughed into it.
Third Party Fire and Theft Insurance
The basis of
this is similar to Third Party Insurance, yet it has two very distinct advantages in that the
insurance covers you for the loss of your car through fire or from theft. The rest of the
cover is exactly the same as Third Party, so once again it remains a relatively cheap and
popular option for the young driver insuring his first car. One thing worth noting with all
Third party insurance is that you will only get your car replaced on a like-for-like basis,
and not new for old like a Fully Comp policy would do.
Fully Comprehensive Insurance
This is the most expensive of the three types of Car Insurance. It is also the insurance
with the most features and the broadest spectrum of cover. A Fully Comprehensive Policy not
only insures you against damage to your car but will also meet the cost of repairing damage
to other vehicles as well, regardless of who was at fault.
Fully Comprehensive Insurance
will also cover you for everything in a Third Party fire and Theft policy, in addition you
might find you are covered for loss or damage to personal effects, accidental damage and medical
expenses too. On top of this there are also optional extras you can buy when you take out
the insurance policy. The more common extras are breakdown cover, legal expense cover and a
courtesy car for those occasions when yours is off the road. Although these are not essential
they do, however, give the policy holder the peace of mind in knowing they are covered for
a multitude of eventualities on the road.
For example, legal expense cover bought as an optional
extra on a Fully Comprehensive Insurance policy will pay any legal expenses that can arise from
a collision with an uninsured car, although there are still sometimes upper levels you
cannot exceed in any one claim. Always read the small print very carefully on the policy as
this upper limit will be quoted somewhere in there. Being wise to these limits and exclusions
in your insurance policy now could save you from any heartache in the future.
Once you have decided whether it's third party or fully comp insurance you require then
you need to consider the finer details of the policy. Insurance companies will
offer the three basic types of insurance as standard, but when it comes to buying one you
will normally be offered extras that may affect the price of your insurance premium.
Some of these are:
Legal Expense Cover
This might already be included
in the insurance, but if it isn't you might be asked if you wish it as an additional extra.
If you do decide to have this it will be added to your insurance policy and probably raise
your premium to some extent
Protected No Claims Discount
If you have managed to build an insurance history of no
claims against the insurance policy then you might wish to protect against losing this. With
a clean claims record you are rewarded with discounts from insurers, sometimes as much as 65%, so by
protecting this no claims discount you can keep on enjoying cheaper insurance renewals. If you do protect
your no claims discount then you are still normally allowed to make a certain number of claims
before it starts affecting your discount. However, to protect it you will be paying a little
extra on your insurance premium, but this is usually small in comparison to what you are saving
overall on the insurance policy.
If you are the only named driver
on your car insurance then an insurer can establish the risk you pose with far more precision,
consequently this will be of benefit to you when getting an insurance quote. If at the same
time you also have several years no claims discount, then the two combined will almost
certainly ensure your insurance policy is a lot cheaper. On the other hand, if you opt for
car insurance that covers any driver then the risk attached is much greater, this extra risk
will normally make your car insurance premium a lot more expensive.
The policy excess is the portion of any insurance
claim that the policyholder is expected to pay themselves. There is normally a compulsory
excess and a voluntary excess. The voluntary excess can be altered by the policyholder at the
time of buying the insurance, and by requesting that this figure be raised can prove
beneficial to the overall cost of the insurance.
Always remember though, to falsify information or
omit certain details in order to gain cheaper car insurance is not only an offence in itself, but
in most cases will entirely invalidate your car insurance policy.
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Other articles relevant to this are:
No Claims Bonus
Reducing Your Premium
Car Insurance For Women