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Please note that the information provided here is of a general nature only and for more detailed advice on what you are covered for you must refer to your policy or to your insurance company.
Car Insurance

Notes for your general guidance only.

Car insurance can be somewhat confusing to understand at times. There are so many terms and conditions on every policy that you may well wonder what you are exactly covered for. Here are some facts about car insurance and what to do in certain situations.

There are various aspects to consider when applying for car insurance. Many car insurance agencies will consider age, risk, gender, region, and other issues before making a decision. In most instances, insurance companies consider the younger drivers as a higher risk, thus they will increase the rates of premiums. The purpose is to encourage the driver to drive safely to receive lower rates later.   Older drivers are considered safer and usually benefit from reduced premiums.  (I can never understand why we older folk are considered a good risk to drive a lethal machine but are considered a poor risk to relax and go on holiday!!!)

Gender is a factor considered when dealing with car insurance. It sounds biased, and in a way, it is, but at one time female drivers were considered a higher risk. New statistics have proven that the reverse is factual, rather that more males are higher risk drivers than women are. Therefore, ladies if you are paying high premiums on car insurance you may want to head another direction and get a different provider. Nowadays car insurance companies are distinguishing the figures concerning low risk drivers and women.

  • The lowest level of motor insurance available to the motorist is third party and this is also a minimum requirement imposed by law.
  • The terms and conditions of your car insurance policy stipulate that you must keep your vehicle in a roadworthy condition. If this it not the case then you may not be able to make a claim.  
  • Commuting to and from work is a condition that is not usually included in most insurance policies. It is your responsibility to request such a condition otherwise you will not be protected if you are involved in an accident whilst commuting.
  • No claims bonuses can be protected for a small fee in addition to your current premium. You may be allowed to make a small number of claims without your no claims bonus being affected.
  • Honesty is a must when making a claim to your insurance provider otherwise you could risk annulling your policy, meaning that any claims that you make will not be financially covered.  They could also  choose to prosecute you for fraudulent activity.
  • If you are involved in any accident or incident, you must report the matter to your insurance provider regardless of whether you have the intention to make a claim or not.
  • Driving abroad can invalidate certain coverage conditions on your current car insurance. It is recommended that you consider arranging an extended car insurance policy whilst travelling outside the UK. All policies that are purchased within Great Britain will protect you for the minimum required level of cover that is required in EU countries, but this may not be comprehensive enough to satisfy your needs.

In the unfortunate event of your car being written off in an accident, the insurance provider will only pay out for what the car was worth at that time. This could well be only a few hundred pounds if the car is extremely old due to the rapid depreciation in value over time.  So if your car value is low - do not take out comprehensive insurance coverage - instead apply for a policy that covers the victims in any accidents you are involved in (Third Party -TPO) or for security purposes (TPFT).

Third Party Only (TPO)

This is the most basic form of insurance and usually provides the following:

  • Liability cover for Third Parties (Injuries to Third Parties and Damage to Third Party Property).

  • Liability cover for Passengers (For the damage they cause, as a Third Party)

  • Liability cover for Trailers

  • Legal Expenses

  • Foreign Travel Cover

  • Emergency Treatment

Third Party Fire & Theft (TPFT)

This form of cover includes all of the benefits above and can also cover the following:

  • Cover for Fire, Lightning, Explosion, Theft, Attempted Theft, Taking without consent.

  • Cover for Accessories, fitted onto the car, or, stored in the garage.

  • Towing

  • Storage

  • Delivery after repair

Fully Comprehensive (also known as Fully Comp)

This form of cover includes all of the benefits above and the following:

  • Cover for Storm, Flood, Vandalism, Malicious Damage, Accidental Damage

  • Variable Excesses dependent on choice and/or age of driver

  • Personal Effects Cover

  • Medical Expenses Cover (for anyone in the insured car)

  • Death or Injury Cover (Only for the regular driver and/or spouse in any private motor vehicle)

The costs

The price of insurance can add a lot to the cost of motoring so it's worth knowing the factors that affect the premium you are quoted. Shop around and compare quotes from different insurers. They base their premiums on their claims experiences which will differ.

One company may see your area as higher risk than others. One may charge more because of your occupation. Shopping around on the internet makes it even easier because you can quickly see the effect of, for instance, accepting a larger excess.

 There are many different insurance categories, with price, performance, and the cost of replacement parts the main factors that dictate the one your car falls into. Driving a small (er) car is the best way to cut the cost of insurance.

Your age, sex and address all affect the price you are quoted. Young male drivers generally are charged the most, while women in their 50s pay the least. Older people - like us - generally pay less.  (I wonder why we pay more than double for Travel Insurance?? - back to Car insurance..)

You will usually pay more if you live in a city rather than in a rural area. Parking your car on the street overnight, rather than in a garage, will also mean higher premiums.

High risk categories

Some insurers might class you as higher risk if you are a sports professional, entertainer, barman, chef , builder etc. But you may be able to avoid having your premium loaded by shopping around. Some insurers specialise in covering people traditionally regarded as higher risk, or non-standard. Even if you can't avoid having your premium loaded, the extra you are charged is now typically in the region of 10%-15%, down from 30% or 40%.

If you suffer from a health condition that could affect your ability to drive, including epilepsy, vision impairment, certain heart conditions or sleeping disorders, or if you are taking any medication that could do the same, you must inform the DVLA. If you don't, you could be charged with a criminal offence.

How the "no claims discount" works

You typically get a 30% discount after one year of claim-free driving, rising to 65%  or 70% after four or five years. But companies vary.

Many insurers now offer the opportunity to pay a bit more to protect your no claims bonus. The rules vary but you may be able to make two claims in three years, for example, before your bonus is affected. Protecting your bonus will not stop your insurer from hiking up the premium at renewal following a claim. But at least you won't lose your no claims bonus on top.

Making a claim does not automatically mean you lose your discount. It depends whether the claim is a 'fault' or 'not fault' claim.

This is not just a question of whether or not you were to blame for the accident, but depends on whether your insurer can recover all its costs from someone else.

For example, if you skid on black ice and hit a wall, your claim would be classed as 'Fault', even though you were not to blame, simply because your insurer can't recoup the cost of fixing your car from anyone else.

Where another driver is involved, unless it can be proved beyond doubt that the other driver was to blame, the two insurers will often settle a claim on a 50:50 or 80:20 basis. This means both drivers will lose some of their no claims bonus. With most insurance companies, you will lose two years of no claims bonus if you have a fault claim.

Making a claim

If your car is stolen, report it to the police first and then your insurer. You will have to wait a while because many cars are stolen by joy-riders and later recovered.

If it is never found or is a write-off, then you may face another problem. Your car may have been in good condition with a low mileage, and the amount the insurer gives you may not allow you to replace it with an equivalent machine.

In usually pays to use a car buyer's guide - Glass's Guide is the most frequently used. If its tables support the insurance company, you'll find it hard to get a better offer, even if the car was in good condition.

If you have been in an accident and the other driver was uninsured, personal injury claims and some damage claims will be met by the Motor Insurers' Bureau - (01908) 240 000).

This is financed by a levy on all insurance companies and was set up to compensate victims who would otherwise lose out through no fault of their own.

It will also pay out if you are hit by a driver who has bought insurance from one of the fly-by-night unauthorised companies that offer cheap insurance. If you find yourself in this position, tell the police.

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