There’s no getting around it; car insurance is a legal requirement, and as of 2011, any car not declared as being ‘SORN’ (Statutory Off Road Notice), is required to have a continuous history of insurance and road tax. This is serious stuff as anyone who is caught breaking the rules can be served an unlimited fine, 6-8 points on your licence – or total disqualification, as well as having your vehicle seized and destroyed. Check out our guide below to help you work out the best type of cover for you
Types of Car Insurance
Car insurance typically falls into one of three categories:
Third PartyThis is the most basic type of cover and therefore the cheapest. You might also consider this the minimum legal requirement. It basically covers any other parties should you damage their vehicle or property, but offers no coverage for any costs to the damage of your vehicle
Third Party Fire & Theft This is second level of insurance available and covers third party damage, as mentioned above, as well as covering any damage to your vehicle in the event of fire or theft
Fully Comprehensive This is the highest level of policy you can acquire. It will insure you for all of the above, as well as covering yourself for any accidental damage to your car. Typically you’ll also be insured for any personal effects in the car such as your sat nav, as well as (at least third party) coverage to drive another’s car with their permission
Which type of insurance is best, really depends on your circumstance. For example younger drivers often opt for third party only, as full coverage can be expensive for them – whereas older drivers might be delighted to find that age discrimination sometimes works in their favour, and that there isn’t a great leap in price between the three policies. Furthermore, if your vehicle is quite old, there may be no value to having a fully comprehensive policy due to the cost of the repairs potentially costing more than the car is worth.
Factors Affecting Your Policy Quote
Insurers take a number of things into consideration when building a quote for your policy. Typically these are
- Age As mentioned previously, younger drivers can expect to pay more for their policy, as statistically speaking, younger drivers are more likely to make a claim, and therefore considered a higher risk.
- Car Obviously the more valuable the car, or the higher the performance of the car, the greater the risk of a claim, and as a result you can expect the policy prices to reflect this
- Vehicle Purpose How you use your car – how far you drive, how often as well as your occupation is also taken into consideration. Naturally the more time you spend behind the wheel, the more likely you are to need to make a claim
- Home location You policy will be affected depending on the rate of vehicle crime in your area
- Driving History Any prior convictions will affect the price of your insurance
- Voluntary Excess Most providers will offer you the chance to increase the excess fee (the amount you pay for processing a claim), in return for a lower premium
Whichever type of coverage you opt for, you’ll need to cross reference and compare different policies to ensure you’ve got adequate insurance. Policies can differ greatly in their specific details, for example, one provider might include windscreen damage on a fully comprehensive policy. The same policy might exclude seemingly vital things such as legal expenses or replacement car rental.
If you find that the policy you’re considering might be lacking in certain areas, you can consider bumping it up with optional extras. This will of course push the price up, so bear in mind how much you’ll be paying in total. Often, once you compare this against some of the more expensive complete policies, you may find out that you’ve ended up paying more!
All insurance policies require you to pay an ‘excess’ fee. Essentially this is the amount deducted from your claim should it be successful. Excess often comes in two forms: voluntary and compulsory.
Compulsory excess fees vary, but typically they are around £200. Therefore, if you need to make a claim of £500, you can expect £200 to be deducted, leaving you with £300. Obviously some small claims won’t be worth making due to the payoff after the excess deduction, as well as you enjoying a hike in your premium price from then onwards. It’s worth noting that some policies do not penalise claimants with high excess fees such as windscreen repair, so keep this in mind when scrutinising the terms and conditions Voluntary Excess is just that – you stipulate the amount you’d be willing to pay in the event of a claim. The reward of this is that you’ll pay a lower premium each month. Of course, the danger is that if you set the excess too high, there won’t be any value to claiming for small amounts of damage.
Be Honest With Your Application
Don’t be tempted to lie on your application about any information in order to try and obtain a lower quote. Aside from it being fraud, any excuse an insurer can employ to void a payout will be taken without regard. This also applies if you’ve made any modification to your vehicle since taking out the original policy. That being said, not all modifications will result in a premium increase. If you’ve installed new security measures for example, this is likely to reduce your cost. It’s always worth checking with your provider, as you’ll benefit in the long run
Finally if you’ve started using your car for business during your current policy – even if only visiting clients, you’ll need to let your insurer know to avoid any later problems. Standard policies on cover domestic and social use so you may need to consider a specialist policy for business cars.