The importance of reading the fine print on your car insurance policy starts from the beginning. When shopping for insurance, everyone wants to save money, but it is important not to cut corners. It is especially important not to try to get a lower premium by leaving out information such as previous claims or a speeding fine from years ago. If you do not mention everything that could impact on your premium cost, there is a danger that your next claim will be voided.
It is also important to read the fine print when determining which policy to purchase. The compulsory policy excess, money the policyholder must pay out when making a claim before the insurance company will cover the remaining costs, can vary from one insurance company to another. Typically these amounts are around £100 to £150 for fire and theft, and around £60 for windscreen claims.
However, before deciding on a policy, it is good to look into what the excess amount for each level of cover is, as third-party only coverage will only cover certain damages. This being said, some levels of coverage only ?allow? a certain number of claims per year, and they charge a higher premium when these claims are made. Adding ?voluntary? excess can reduce these premiums, saving hundreds of pounds per year.
Never make assumptions about the policy you have, especially when it comes to driving motor vehicles belonging to someone else. If you are in an accident while driving someone else's vehicle, the damages will not be covered by the most basic type of insurance required by law, the Road Traffic Act Cover. The Road Traffic Cover gives less protection than third-party only insurance, and can leave the policyholder open to being liable for a very expensive accident. Road Traffic Cover also only covers vehicles being driven. When the vehicle is parked, the auto is not covered for damage, theft or fire. This is such until the named policyholder for the vehicle takes control of the auto again.
Making assumptions will also cause problems if the policyholder assumes coverage is the same from one insurance company to another. Even though the basic definition of the different levels of cover may be the same, the terms and conditions of the policy can definitely differ. Comprehensive car insurance will not always cover damage to windscreens, or as mentioned above, the policyholder may be limited to a certain number of windscreen claims per year. Policyholders are not always entitled to a courtesy car, or there is often a time limit for use to which the policyholder is subject to. Important to those traveling to the EU, some policies only give 30 days of full cover per year, and some policies only give Road Traffic Act cover.
The fine print can be difficult to get through, but it is definitely worth researching. Here is a checklist to look over before making any final decisions on an insurance policy:
- Is the coverage comprehensive, third-party, theft and fire, or third-party only?
- How much is the total policy excess in the event of an accident? How much is the excess and the terms for windscreen claims?
- Make sure all drivers are covered, if not your policy could be void in the event of an accident involving a driver who is not covered.
- Make sure legal expenses are covered in your policy?
- Will roadside recovery be covered?
- Are courtesy cars included in the policy? If not, is this something that is important?
- Is the full scope of the insurance policy included when driving the car within Europe?
- Is there a specific number of claims that can be made per year?
Before signing up for a car insurance policy, make sure the fine print does not limit the cover you desire. The fine print can give you important clues about how the prospective insurance company will handle your claims as well.