Car Insurance Made Simple
Comments (1) Car insurance protects you and your family financially if you ever have a motor accident, be it your fault or not. It is a mandatory and necessary expense if you own or drive a motor vehicle. A car insurance policy will provide you with much needed protection against financial losses incurred because of traffic accidents.
Not all insurance policies cover you against damage to your own vehicle, or liability for property damage or legal fees. 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 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. The type of car insurance cover that you choose will determine the level of protection that your insurance company will give you.
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 • Car financing could put you and the car in a higher risk category • Personal effects loss may be covered by some insurers • Breakdown cover may be included in some policies • You could find a policy which includes 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. It really only means just that – you have used the same insurance company or insurance broker for the past several years.
An insurance broker already familiar with your demands and needs from your insurance history will probably be in a position to get you the best deal. 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.
Car depreciation occurs as a result of the age and usage of a vehicle. Your new car begins to depreciate as soon as you put the first few miles on the clock. The value of your car will decrease every year. You should therefore insure accordingly by adjusting your car’s declared value at renewal time. This is logical but often people can overlook the obvious. Check the value of your car against its blue book value rather than the price you paid – your broker can do this for you. 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. Your declaration concerning the value of the car should be as accurate as possible. The more expensive a car is the more it can cost to insure. 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 personal circumstances may be different that at your last renewal. 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. Change your insurance details to reflect these changes in circumstance. If you drive fewer miles your insurance company will recognise the decreased risk and your premium will be reduced accordingly.Adding additional drivers is not as expensive as you would think; a great tip here is to wait until renewal time if possible. Insurers may charge you an administration cost for adding additional drivers, but if you wait until it’s time to renew you may not incur this fee.
SO WHICH IS THE BEST CHOICE OF CAR INSURANCE COVER?
Insurance cover in the UK falls into three different categories.
1. Basic Third Party Insurance is mandatory in many countries, including the UK. If you are involved in an accident, this type of cover will protect you financially against damage to the other vehicle or its occupants. This type of insurance covers your liabilities in the event of damage to another vehicle or person in an accident. Third party insurance will not cover any damage inflicted on your own car or to your person. 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 leased or financed vehicle will require a fully comprehensive insurance cover.
3. Fully Comprehensive Insurance offers the widest coverage. As well as providing basic cover as in third party, fire and theft, it will also cover vehicle damage and bodily injury sustained in an accident. If the vehicle value is higher than the insured can afford to pay to replace it, then fully comprehensive is the preferred choice. 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.
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 • Marital status Rural or Urban • How big the car is • 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. If you live in the country or in a low crime rate location you are likely to get a lower premium than if you are a city-dweller.
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. Car modifications therefore equate to increased risk for insurance companies, and will result in increased premiums.
2. Driver History • Years of driving experience • Claims history • 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. This is confirmed or denied by the number of insurance claims made during the previous five years. Driving convictions such as speeding, dangerous driving or drink diving will affect the premium. Parking offenses do not push up your premiums unless you incurred points.
Annual mileage is a factor too. The more a vehicle is on the road, the higher the risk for an accident.
3. Vehicle History • Current vehicle value • Whether you own the car or if it is leased or financed • Car make and model • Size of engine and performance category • 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. Additional benefits to your policy can often be added at little extra cost when buying online. 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. This will be covered if you have fully comprehensive insurance.
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 assistance • Help with legal fees and advice • Repair or replacement cover for windscreens • NCD 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. If a website was built properly its users will find it easy to get a great price quickly and easily. An insurance aggregator website is a good place to get you started. Online insurance aggregator websites are generally very 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. 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 buy online, call your broker to see if you can get a better deal based on your findings. It’s important to remember that you should compare like-for-like quotes when looking at different insurers. This may not always be as simple as you at first think. Good luck on finding the best policy for your needs.
