Motor Car Insurance
This article is about the different types of car insurance cover available and advice about how to decide
which company is better for you
There are a few things that you need to know about insurance for your vehicle. There are several different types available
which will be discussed in turn
All have their own merits and non is either wrong or right. Just more or less suitable for each individual. There is also a difference between insurance brokers and insurance companies. Some only deal online whereas others are office based. Again they have their own merits. This article is designed to inform you so that you are better able to make that very important decision. What type of car insurance do I need and where will I buy it from?
There are three well known types of car insurance cover available for personal cover which I will explain below. these are not the only types though and I would encourage you to look around if you have any requirements at all that may be classified as business use, motor trade, sports or courier in particular. There are so many different business policies out there aimed at specific trades that I could never explain, or probably even understand, them all.
The first piece of advice that I would automatically give to anyone who asked me is this:- Never accept the first car insurance quote offered. Always look for at least three. Do not automatically accept the cheapest. Look closely at exactly what you get from both the cheapest car insurance, and the next cheapest, and choose between them.
You will probably have different people swear to you that theirs is the best car insurance company and that you would be a fool to go elsewhere. You would be a fool to listen to them. Look around for yourself. Your circumstances are unique to you. Any variation at all between your circumstances and those of a friend can lead to a different premium being offered. I repeat again. Look around for yourself, ask questions if you do not understand exactly what you are getting and do not automatically accept the cheapest car insurance offer.
What types of car insurances are available?
There are three main types of car insurance available for personal use. These are:-
Third Party Car Insurance:
In car insurance terms the first party on the contract is the insurance company, you are the second party because you bought the insurance and anyone who would seek to make a claim from you is the third party.
Third party car insurance is the legal minimum requirement of cover for road users in the United Kingdom. It is the cheapest and in the event of an accident will only pay out in respect of claims from the third party (other person). Any damage sustained by your vehicle or yourself is not covered at all. Now you can see why it is the cheapest and least popular form of car insurance.
On a personal note I have never had and would not entertain this type of cover. I have never been in the position to pay for expensive repairs out of my own pocket and certainly never in a position to pay for a replacement vehicle straight away should mine be damaged beyond repair.
Third Party Fire and Theft Car Insurance:
The level of cover for you is exactly the same as for third party car insurance above. The only person who gets full cover here is the person who makes a claim against you. The only extra cover that you get is in the unlikely event that your car is damaged by fire or is stolen and not recovered.
I have personally used this level of car insurance cover before but it was only on my first cars. My first cars were definately from the budget section of the adverts. Quite literally the insurance premiums that they wanted when I first passed were more than the value of the car.
Comprehensive Car Insurance:
Comprehensive car insurance cover provides the greatest peace of mind. If you are in an accident you can be assured that you and your vehicle are covered as well.
If you are considering comprehensive car insurance cover you need to know about 'excess' values. It is possible to lower the cost by accepting a higher 'personal excess' value. This is the amount that you will have to pay from your own pocket before any your insurance cover starts. The higher the excess value that you are willing to accept, the lower the car insurance premium.
What I usually notice is that they ask you to accept a massive excess figure before there is any significant change in the price of the car insurance policy.
There are often extras with a comprehensive car insurance policy. Check the value of them before you sign. If they are not useful to you then their value to you is nil. Do not pay for what you do not require.
It is possible to pay extra to protect your no-claims-bonus.
No claims bonus is accrued on a yearly basis usually at a rate of ten percent per year no matter what level of car insurance cover you choose. The maximum discount is usually sixty percent. If you make a claim you will lose it all and have to start all over again.
If you lose a wing mirror or have a minor dent from a concrete parking bollard it is probably going to be in your best interests to pay for it to be fixed without involving the car insurance company. If you have more serious damage and need to use your insurance policy then you bear in mind that you will have to find cash for the excess value and your no-claims-bonus will be lost.
What is Drivers Legal Protection?
There are expenses which are not covered by standard motor insurance. Remember the excess fee that you will have to find yourself. Why should you if the accident was someone elses fault? The policy will cover you for legal expenses incurred in seeking to recover uninsured losses (e.g. own damage excesses, hire of another car during repairs, loss of earnings) and compensation for personal injuries after a motor accident. You are also covered in respect of legal expenses associated with civil actions and motoring prosecutions. There is also cover for the legal expenses associated with the pursuit or defence of disputes relating to the sale, purchase, hire, service, repair or testing of the insured vehicle. Legal defence costs in respect of prosecutions are also insured.
The above may be a heavy duty paragraph but believe me, if you ever need a solicitors services with regard to any of the above there will definately be a heavy duty bill as well.
I always pay for the drivers legal protection scheme and have had occasion to use it after another vehicle hit me whilst I was stationary. The insurance company was great about the damage to the car but the legal cover was invaluable for recovering my excess fee, cost of a replacement tuition vehicle while mine was off the road and compensation for loss of earnings. I would advise everyone to take out this cover. The best thing is that it does not cost much.
What is the difference between an insurance company and an insurance broker?
An insurance company is tied to selling you their own products. There may well be a different company who has a policy which is better suited to your requirements or that has a cheaper premium but they will be trying to sell you theirs.
An insurance broker has a computer system connected to the databases of literally hundreds of car insurance companies and theoretically is in the best position to find the best quote for you.
Here comes the crunch. The insurance broker is paid by commission from the car insurance company whos products they sell. A higher commission on offer from a particular insurance company might sway them to prefer to recommend the products of that company. Welcome to the car insurance game.
I would advise that you try both car insurance companies themselves and brokers to see who will give you the best price for the insurance cover that you have chosen.
Should I buy online or from a shop in town?
In the case of car insurance company products that you wish to buy directly from them it can be better to buy online as they encourage people to do so by offering a further discount for online purchase. A simple check on a search engine will turn up thousands of brokers that you will never have heard of. Do you really want to pay these people for something that they may not provide when you need it? Where would you complain to?
If I was buying car insurance from a well known company then I would be happy to pay online. In the case of insurance brokers I insist on walking into the shop. If anything does go wrong in either scenario I kow where and how to ask questions or complain.
