Car insurance is there to give you financial protection in the event of an accident whether or not you are responsible for it. You must factor-in car insurance as part of your motoring expenses. You need a good car insurance policy for the financial protection it will afford you in the event of an automobile accident.
Sadly not all insurances include fixing the damages to your car, protecting against liability, legal fees or damage to any other property involved in the accident. Bolt-on niche insurance products such as inconvenience cover, gap insurance and even legal protection insurance can prove to be invaluable additions to your comprehensive car insurance to ensure an accident does not end up costing you more than you can afford should the worst happen.
Choosing the right car insurance will protect not only you, but your vehicle, and third parties in the long run. If you want to drive a vehicle in the UK, you must prove that you have a valid car insurance policy. 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 • Effects of car depreciation • A change in personal circumstances • Your car finance may put your car at risk • You may be able to cover the loss of personal goods • You may find inclusive breakdown cover • You may find an insurer offering inclusive legal cover • You could find a policy which includes cover for 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.
If your broker manages your entire insurance portfolio then he is in the best position to get you the best deal, as he already has information about your demands 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. Car depreciation starts as soon as you drive it away from the car dealership. For every year that you own a car it will decrease in value. Make sure that your insurance policy reflects this reduction in value. This is logical but often people can overlook the obvious. 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. This is because even fully comprehensive policies will only cover a vehicle to its blue book value rather than it’s purchase price. So make sure that that is what you declare the car’s value to be. It will usually cost more to insure a more expensive car. It’s possible that your insurance company may offer you a like-for-like replacement after an accident – but this is uncommon. There is however an insurance product called Vehicle Replacement Insurance which does just that! Click on the link to find out how it works in more detail.
Your circumstances may have changed since you last renewed your car insurance. You may have switched jobs and not drive as many miles per year or have paved the front lawn and turned it into off-street parking. Get insured according to any changes in circumstances – no matter how small you think they are. You can get a significant discount from your insurer if you are a low mileage driver.If you wait until renewal time it probably won’t be that expensive to add additional drivers to your car insurance policy. Adding additional drivers mid-year often incurs administration fees which could be avoided if done at inception or renewal time.
WHICH LEVEL OF COVER SHOULD I CHOOSE FOR MY CAR INSURANCE?
Insurance cover in the UK falls into three different categories.
1. In many countries including the UK, Third Party Insurance is mandatory. It provides coverage to any third party involved in an accident with the insured vehicle including passengers. Third Party Insurance acts as security against liabilities for damage to another person in a vehicle accident. Third party insurance will not cover any damage inflicted on your own car or to your person. You will not be reimbursed for repair costs with a third party only insurance policy.
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. This type of cover can offer the best value for a policyholder if the car does not have a high market value. If you are leasing a vehicle or have acquired it via a finance company, then you will need to provide fully comprehensive insurance for the vehicle.
3. “Fully Comp” will give you the widest insurance cover for your vehicle. It provides the basic insurance of third party, fire and theft and covers damage to the insured vehicle and any bodily injury suffered by the policyholder in an auto accident. If your car is worth more than you could afford to replace it, then you should opt for a fully comprehensive insurance policy. Finance Gap or Vehicle Replacement Gap Insurance are additional insurance products available to top up the gap between your payout and the cost of paying off a new car, so go online and find out more about these insurance products.
Many factors affect car insurance and most insurance companies offer a range of secondary covers to meet the varied and specialized needs of the policyholder.
FACTORS AFFECTING CAR INSURANCE
1. The Policyholder• Age of the policyholder • Gender of the policyholder • Marital status • As a policy holder your address affects your premium • Engine and car size • The cost of replacing the vehicle • 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 married men with kids have more responsibilities than single men and the insurance companies therefore consider married men a lower risk category.
Where a person lives also affects the insurance cost. Motorists living in rural locations and in areas with a low crime rate are more likely to get a lower insurance premium than those living in cities.
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. These factors translate to increased risk for insurance purposes, and premiums will increase as a result.
2. Driver History • Years of driving experience • Claims history • History of driving convictions • 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. The number of insurance claims made in the previous five years will either confirm or deny these assumptions. Most driving convictions negatively affect motor insurance premiums for drivers. Parking offenses do not push up your premiums unless you incurred points.
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 • Make and model of the vehicle • Engine capacity and performance • 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. A named driver with several years of insurance cover and no claims against his or her name could find that fully comprehensive car insurance costs almost the same as a lesser level of cover, but with additional benefits such as a free courtesy car etc. When buying online you may find that additional benefits can be included at little increased cost to you. Fully comprehensive insurance cover will be required for leased or financed vehicles. The leasing or finance company will require reimbursement from the policyholder for damage to the car. 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 car included • Roadside and/or breakdown insurance cover • Specialist legal advice/assistance with legal fees • Windscreen replacement • Protecting your no claims bonus • 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. Minimise your aggravation by only visiting user-friendly insurance sites. A good place to start is on an insurance aggregator website. Aggregator websites are easy to use. They will search the insurance market for you and show you the products which best match you needs based on the answers to some initial questions. After the site has collected the quotes, you can then compare different policies, as well as being able to save your quote, amend your requirements if necessary and if you are happy you can then buy online. Before you buy online, call your broker to see if you can get a better deal based on your findings. Remember that you need to compare quotes on a like-for-like basis. It is not always a quick and easy task. Good luck with finding the best possible car insurance policy.
Comments (0) 
