Car
Insurance

Car Insurance Explained
With Tips and Tricks On How To Reduce Your Costs!!

Unfortunately (or fortunately for us) everyone in the UK who owns a private car must have insurance, and to someone who is fairly inexperienced to motor insurance the task of finding the most appropriate policy can be daunting. 

How To Obtain Insurance Cover.
There are more and more ways of obtaining motor insurance, through an insurance broker, directly with an insurance company, through online comparison sites, even through a supermarket, but which is the best way to obtain insurance?

By going directly to an insurance company like Norwich Union Direct or Direct Line for example, they say they can reduce costs by cutting out the the middleman, this may be so, but they can only ever quote themselves and in most instances they are not going to be the cheapest option anyway.

Comparison or aggregator sites work in a similar way to insurance brokers in the fact that they compare quotes through a panel of insurance companies. That's about where the similarities end. With comparison sites you are responsible that the information you input is correct. The sites check for the cheapest policies, but the cheapest policies are often inadequate or have various restrictions or clauses like much higher excesses for young drivers, maybe no courtesy car or legal cover,  limited mileage restrictions, or no European cover, these sites will not tell you about these clauses, it is basically down to you to ensure the policy is adequate, most times you wont know about these restrictions until you come to make a claim and suddenly you find you're not paid out for it..

Insurance brokers will search a large panel of selected insurance companies and although they will look to find the cheapest policy for you, they will explain any restrictions a policy may have like full policy excesses etc or clauses to ensure you are aware of them and that the policy quoted is right for your needs as a motorist.  If you have any problems or need to make a claim you can speak to someone in the UK and a broker will be able to provide you with advice on mid-term changes or claims. At the renewal time they will also automatically search the market again for you to ensure your current insurers are still the most suitable option for you.  A direct company or aggregator site will not provide this level of service.

So we advise, use a broker!!!
 

The Right Level Of Cover
Basically speaking there are 3 levels of cover you can choose from.

1. Third Party Only.   This is the basic minimum level of cover you can have for car insurance. In the event of an accident this policy will pay for any damage to someone else's property, or injuries to others, including passengers. You will have no cover for damage caused to your own car, although if you are in the right in the accident this damage can normally be recovered from the third parties insurers.

2. This Party Fire & Theft.   This is the same as third party only cover, but includes cover for theft of your car or if the car is damaged by fire.

3. Comprehensive.   Also know as 'fully comprehensive or 'fully comp' this cover will provide the same cover as per third party fire & theft and will also pay for any damage caused to your own car irrespective of whom was to blame. This cover will also include cover for windscreen or window damage and also damage to personal effects in the car (to a set limit).  A hire car can normally be given to you as well whilst your vehicle is being repaired.

A rough rule of thumb is to insure a vehicle of £ 500 or less just Third party only, between £ 500 - £ 1,500 either third party only or Third party fire & theft, and over £ 1,500 either Third party fire & theft or Comprehensive.
We would say if you would struggle to replace a car of similar condition if you went out, hit a hedge and wrote the car off,  then insure it Comprehensive.

Tips.
You're better off getting a quotation on all 3 covers as quite often third party fire & theft cover is cheaper than third party only as there are more insurance companies doing this cover and sometimes comprehensive can work out cheaper than third party fire & theft as certain discounts like age of vehicle, age of driver etc can reduce the premium.        Just ask!!

Why Does Car Insurance Cost So Much
These are some of the things which an insurance company will take in to account when working out the price of your insurance and why some people are more expensive than others.

• Sex.  Females although apparently they have about the same if not more accidents than males, they're claims are much smaller.  Usually blokes will have their mates in a car and an accident often results in injuries to passengers and liability claims is what puts the insurance up for males, which is a main reason women can find cheaper cover.

• Driver Age.  Young drivers and learner drivers are less experienced and are therefore considered more likely to be involved in an accident. Discounts will be given the older you get, but once you get to around 70+ your discounts will start to decrease.  As you get older your reactions often start to slow and stats show an increase in accidents arises in this age group.

• Insurance Car Group.  Cars are given an insurance group between 1-20 (or 1-50 for European companies). This will normally be based on the performance of the car and likely repair costs if that vehicle is involved in an accident.  Prestige and performance related cars will normally be higher rated because of this.

• Security.  If the vehicle has a standard alarm or immobiliser, insurance companies will not normally give a discount for this as it's normally included within the group of the car.  If it has an aftermarket Thatcham approved system then additional discounts can often be given.  If the vehicle is kept in a locked garage or even off road then additional discounts can given.

• Where You Live.  Being based in Cornwall we have one of the lowest rated areas in the country because of the low traffic density and lower theft risk.  Larger cities are more expensive because the likeliness of having an accident is greater and normally a higher crime rate.  Move out to the country to reduce your premium.

• Your History.  If you have been involved in an accident or made a previous claim, fault or non fault, your insurers must know, stats show persons who have an accident are more likely to be involved in another one within 3 years.  Motoring convictions will also increase your premium, even just one speeding conviction, so drive steadily.

How To Cut The Cost Of Your Car Insurance, Hints and Tips
Below we give you a few ideas on how you can reduce your premium without cutting your cover.

• Young and Learner Drivers.  Taking a 'Pass Plus' course can help to bring your insurance premium down by as much as 35%.  Check with your insurers first as currently only a few companies give a discount and often their starting prices are much higher than the more competitive companies. 
  Look at adding a parent to your policy as a named driver as most companies do give a discount if your mum or dad is named on the policy as well.
  If you are learning and looking to soon pass your test, check to see if the insurance company you are going to use increase the premium once you have passed your test, some do, some don't.

• Parking.  If you have a garage and can fit your car in it, do so as you could save yourself up to 10%.   Stipulations can be put in to force though with some companies, so if it's left in the open even once, they may not pay a claim if it's stolen from outside your home.

• Mileage.  If you only drive say 4,000 miles a year, make sure your insurers know, as again, big discounts can be given. Obviously if you are on the road less, there is less chance of you having an accident.  If you don't drive to work, tell your company, insurers give discounts if you don't commute to and from work.

• Marriage.  If you want an excuse to get married, tell the other half you can make savings on your car insurance.  Married drivers statistically have lower claims than single people so attract lower premiums.

• Use Of Car.  If you don't drive to work, tell your company, insurers give discounts if you don't commute to and from work.  On the other hand if you drive to more than one place of work, make sure you have business use on the policy as standard Social, Domestic & Pleasure cover will cover you.

• Cover.  Gets quotes on all 3 types of cover as quite often third party fire & theft cover can be cheaper than third party only and also comprehensive cover can be cheaper than third party fire & theft cover.  Make sure you ask.

• General Drivers.  Normally the less amount of drivers you have the cheaper the premium.  Don't have Any Driver cover if there are only a couple of drivers who will ever drive it.  If you are married though don't just insure yourself, add your partner on as this will normally reduce the premium.

• Excess.  If you have to make a claim, this is the amount you will have to pay towards the damage to your own vehicle.  Nearly all car insurance policies will have a compulsory excess, usually starting at £100.  In addition to this you can have a voluntary excess on top, the higher you go, the more your premium will reduce.  Be wary though, quite often increasing the excess by £200-£300 may only reduce the premium by a few quid, so if you have an accident you will be a lot worse off.  On top of this again you will find increased excesses for drivers under 25 and inexperienced drivers, so make sure you find out the 'total' excess before taking out a policy.

• No Claims Bonus & Protection.  All insurers will give a discount for having a claim free driving experience, most insurers will give a 30% discount off for one year, followed by about 10% extra each year until you have about 60-70% discount. Some insurers give discounts up to 9 years without claim.  Once you get to 4 years it is worth paying a bit extra (normally about 10%) to protect the No Claims Bonus, so if you have to make a future claim you wont lose any of this bonus which you have built up. Most insurers will allow you up to 2 claims in a 3 or 5 year period before it starts to knock the bonus off.

• Payment Of Insurance.  If you can you are better off paying for your insurance in a one-off payment.  Nearly all insurers will charge up to 15% extra for paying your insurance monthly by direct debit.  We can accept payment over the 1st 2 months of a policy without any charge.

• Security.  If you want to add an alarm or immobiliser to your vehicle make sure it is a Thatcham approved system. This is the only type of system insurers will give a discount for.  Discounts can also be given for Tracker systems up to 10%.

• Be Honest.  Providing you answer the questions on a quote form fully or when speaking to an advisor over the phone and don't try to hide anything just to get your premium a few quid cheaper then you should have no problems when a claim arises.  Often people conveniently forget to tell insurers about that speeding conviction they had a couple of years ago, or the change of alloy wheels they made a few months ago, and then wonder why their insurers refuse to pay out when they have an accident.  Be honest and your insurers will be honest back.