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Chosing The Best Motor Insurance Cover
Car insurance is there to give you financial protection in the event of an accident whether or not you are responsible for it. 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.
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. There are different levels of cover which are determined by 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 • Personal effects loss may be covered by some insurers • You may find a policy which includes 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. It really only means just 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. They may be able to consolidate those demands and needs into a package which often will only be available via a broker.
Car depreciation occurs as a result of the age and usage of a vehicle. Car depreciation starts as soon as you drive it away from the car dealership. Your car’s value will decrease every year. You should therefore insure accordingly by adjusting your car’s declared value at renewal time. This makes perfect sense. So always ask your broker to check the value of your car against its blue book value, rather than 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 ensure you are as accurate as possible when declaring the car’s value. The more expensive a car is the more it can cost to insure. The exceptions to this rule may be when an insurance company offers to replace your car in the case of the accident for the exact same car or new car of same specification, but this is rare and the chances are that this will not be the case. There is however an insurance product called Vehicle Replacement Insurance which does just that! To find out more about how Vehicle Replacement Insurance works click on the link.
Your car insurance could be affected if your circumstances have changed since your last renewal. 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. Allow your insurance policy to reflect these changes by renewing accordingly. You can get a significant discount from your insurer if you are a low mileage driver.It’s not always as expensive as you may think to add additional drivers to your existing policy – particularly if you wait until renewal time. By waiting until renewal time you may be able to avoid the administration costs of adding extra drivers.
WHICH LEVEL OF CAR INSURANCE IS THE BEST CHOICE?
In the UK, there are three types of vehicle insurance.
1. In many countries including the UK, Third Party Insurance is mandatory. It gives you cover against a claim against you for damage to another car, its driver, or passengers should you be in an accident. This type of insurance covers your liabilities in the event of damage to another vehicle or person in an accident. This type of cover will not protect you against damage to yourself or your own car. This type of insurance will not cover repairs to your vehicle.
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. You must have a fully comprehensive policy for a leased or financed car.
3. The widest coverage is provided by a Fully Comprehensive insurance policy – or “fully comp”. 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. There are specialised insurance products like Finance Gap or Vehicle Replacement Gap which can top up the gap between what your insurance company will pay out and the cost of getting a new car – you can find out more online by doing a simple search.
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 • Men are considered higher risk than ladies • Are you married or single • The area you live in • The size of the car and engine • 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 a married man with children has more responsibilities and the insurance companies will therefore consider this person a lower risk than a single male in his early twenties driving a WRX.
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. An increase in insurance premiums should be expected with car modifications, as these represent an increased risk to the insurer.
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, hazardous driving or driving while intoxicated will affect the premium. Most parking violations are not taken in to account.
Annual mileage is a factor too. The more time the car is on the road, the greater the risk of having an accident.
3. Vehicle History • Current vehicle value • If you own the vehicle, or is it 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. Often as the named driver with many years of no claims under the belt, fully comprehensive motor insurance could cost no more than third party insurance, but with additional perks. Additional benefits to your policy can often be added at little extra cost when buying online. It is mandatory for a leased or financed vehicles to have fully comprehensive insurance. 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 vehicle • Breakdown assistance • Legal assistance • Windscreen replacement • 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. Minimise your aggravation by only visiting user-friendly insurance sites. Consider using an insurance aggregator website for your initial quotes. Aggregator websites are easy to use. You only need to answer the questions once, and then they will select products to show you based on your answers. 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. Remember that you need to compare quotes on a like-for-like basis. This is more difficult than you may initially think. Good luck on finding your ideal car insurance.