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. If you have an accident in your car, you will be glad that you invested in good car insurance for the financial protection that this will give you.

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 product will protect you, your vehicle, and other parties in the long run. You must prove that you have bought car insurance if you plan to drive in the UK. 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
• Depreciation will affect the value of your car
• A change in personal circumstances
• Financing could place your car in a greater risk banding
• It may be possible for an insurer to cover the loss of certain personal effects
• Some insurers may include breakdown cover
• You may find inclusive legal cover offered by some insurers
• You may find an insurer covering your 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.

A good insurance broker is most likely to get you the best coverage if they manage your full insurance portfolio as they then know your history 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. The value of your car will decrease every year. You should get a reduction in your premium to reflect this. This is an obvious statement but can be surprisingly often forgotten. 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. 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. It is therefore important that this is what you declare the car’s value as. Generally speaking, a more expensive car will cost more to insure. In rare cases the insurance company may offer a replacement car of the exact model or spec after an accident. There is however an insurance product called Vehicle Replacement Insurance which does just that! Finding out more about vehicle replacement insurance is easy, just click on the link.

Your car insurance could be affected if your circumstances have changed since 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. Insurance companies lower their prices for low mileage drivers and discounts can be significantIt’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 COVER SHOULD I CHOOSE FOR MY CAR INSURANCE?

In the UK, there are three types of vehicle insurance.

1. You must by law have the minimum of Third Party Insurance in many countries, including the UK. This type of cover insures a vehicle and driver against damage to another person’s car, driver or passengers if involved in an accident. This type of insurance covers your liabilities in the event of damage to another vehicle or person in an accident. The insured is not protected against bodily injury or damage to their own vehicle with this type of policy. 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 Comprehensive Insurance offers the widest coverage.Damage to your car, and personal injury caused by an accident, as well as the basics of third party, fire and theft, are covered by a comprehensive car insurance policy. If your car is worth more than you could afford to replace it, then you should opt for a fully comprehensive insurance policy. The gap between what your insurance payout would be and the cost of buying a new car can be bridged with specialised insurance products like Finance Gap Insurance or Vehicle Replacement Gap Insurance – you can easily find out more about these products by going on-line.
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
• Are you married or single
• The area you live in
• How large the car and engine are
• How much your car will cost to replace
• 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 personis 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. Car modifications therefore equate to increased risk for insurance companies, and will result in increased premiums.

2. Driver History

• Years of driving experience
• Previous claims
• 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. 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 violations are not included.

Your annual mileage is a factor too. Your chances of being involved in an accident are increased the more time your car spends on the road.

3. Vehicle History

• Current vehicle value
• If you own the vehicle, or is it 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. If the named driver has several years no claims then fully comprehensive insurance could actually cost the same as third party fire and theft cover, but with additional perks such as windscreen cover and legal assistance etc. Additional benefits to your policy can often be added at little extra cost when buying on-line. It is mandatory for a leased or financed vehicles to have fully comprehensive insurance. You need to be able to reimburse the leasing or finance company for any 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
• Roadside or breakdown cover
• Legal cover
• 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. Good websites make it easy to get quotes with little aggravation. A good place to start is on an insurance aggregator website. Aggregator websites are easy to use. As the buyer you only need to answer the questions once and they will search the insurance market for you. 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 on-line. Think about first giving your current broker a call and asking them to get you a better deal based on your findings. Remember that you need to compare quotes on a like-for-like basis. It could be more complicated than you at first think. Good luck with finding the best possible car insurance policy.

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Filed under: Car Auto

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