Car Insurance Master Class

Car insurance, like other types of insurance, can give you peace of mind when you have purchased a policy...

Car insurance, like other types of insurance, can give you peace of mind when you have purchased a policy because you know that you will be covered in the event of an accident or if there is a theft. However, under UK law, car insurance is also obligatory if you intend using your car on the public road. Car insurance is usually sold on an annual basis, but it is also possible to get shorter-term cover as well. In most cases, the insurer will quote two prices for a year's worth of cover. One will be for the full year and the other will be broken up into monthly instalments. In general, it is cheaper to buy the policy in full rather than pay in instalments, but either way it is important to shop around for the best deal. If you have a policy already, then check about automatic renewal. This can be handy to ensure you have continuous coverage, but it is often worth looking at competitor pricing before renewing because there are frequently deals on designed to incite customers to switch. Although this involves ringing around for quotations, price comparison websites and insurance brokers can often help to reduce some of the workload when it comes to finding a bargain price.


Types of Car Insurance


Not all policies are alike, so you need to consider this when comparing the offer of one insurer to that of another. When it comes to motorbikes and commercial vehicles, there are many forms of insurance, but with cars there are three main types. These are third party, third party fire and theft and comprehensive. Under a third party policy, only the cost of any other claimant is covered, not your car itself. That means that if you crash into another driver, for example, that your insurance legally covers you for any payout that you might be liable for under their insurance claim against you. However, injuries suffered by you and damage caused to your car is not allowed for. These policies tend to be the cheapest, as you might expect. Secondly, third party fire and theft offer additional cover should your car be stolen or if it suffers from fire damage. Comprehensive cover, as the name suggests, allows for all sorts of eventualities, including accidental damage to your own car as well as to others. It will also often include medical bills that might result from a collision.


Car Insurance Add Ons


Some comprehensive policies will wrap up your car's needs in a single package. As well as the usual ingredients of a comprehensive policy, some will also bundle in things like accidental breakdown cover. Furthermore, some will allow you to drive your car internationally, but others won't. Some will cover the contents of you car - as long as you leave it properly locked up - whilst other will not. When comparing comprehensive insurance policies, it is a good idea to see what sorts of extras might be included to really understand which is the best deal.


Excess


Many people get confused by the excess that comes with any sort of policy but it is not that difficult. An excess is the amount that a claim has to be before you can use the policy. In other words, if your excess is set at £100 and you want to make a claim for £50 of repair works, your insurer is not obliged to pay out. However, if your excess is set at £200 and you make a claim for £500 of works, then you can expect your insurer to pay out £300 - the amount of the claim over the excess. The amount that the excess is set at can usually be negotiated at the start of the policy. The more excess you accept the lower the cost of the insurance. Put another way, the excess represents the amount of risk you accept for yourself before you call on your policy to make a claim.


No Claims Bonuses


After several years driving without a claim, insurers tend to think of you as a good bet and a so-called no claims bonus is offered which often means a reduced price compared to someone without one. The longer you go without making a claim, the better. However, if you do make a claim, expect to lose the bonus and to pay a higher price next renewal. In some cases, insurers will offer a separate part of the policy which protects your no claims bonus in the event of a minor claim - in effect insurance against claiming on insurance. Younger drivers tend to need to drive for a few years before they benefit from no claims bonuses.


Disqualifications


Before driving under an insurance policy, check that it is valid. If in doubt, ring your insurer or broker. If the car is stolen, un-roadworthy, untaxed or carrying a fare paying passenger, for example, then your policy may well be invalidated and driving without proper insurance cover can land you in trouble with the law.


Resources


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