What Is Car Insurance?
Car Insurance provides protection against losses incurred as a result of accidents, theft or damage to your vehicle. Motor insurance can be seen as a legal contract between you and your insurer, defining each party’s rights and responsibilities in the case of an accident. As well as financial compensation, benefits of car insurance services can include alternative transport and breakdown assistance. Many of the questions concerning Car Insurance also apply to other forms of vehicle insurance, ie vans and motorcycles.
Motor insurance is one of the few compulsory forms of insurance, apart from employers’ liability and buildings insurance (if you have a mortgage). It is an offence under the Road Traffic Act to take your car onto the public highway without insurance.
Every time you take the wheel, you run the risk of damage to your car, to yourself and to third parties and their property. While it may be tempting to go for the cheapest insurance cover, this may turn out to be a false economy.
There are three forms of motor insurance cover:
1. Third Party
Third party is the minimum legal level of insurance. The first two parties are the insurance company and the driver. Third party insurance covers your liabilities in respect of:
- Injuries to others (i.e. to your passengers and other persons not inside your car).
- Damage to other peoples’ property (e.g. the third party’s car, but not your own vehicle).
2. Third Party, Fire and Theft
It covers the aforementioned Third Party risks plus theft, and damage to your vehicle caused by attempted theft and fire.
3. Comprehensive Car Insurance
Comprehensive insurance covers third party, fire and theft risks plus:
- Accidental damage to your vehicle
- Malicious damage to your vehicle
- Personal accident
- Medical expenses, to a limit
- Loss of, or damage to, personal property carried in your vehicle, to a limit
- New for old replacement in the first year.
- Glass replacement (windscreen, sunroof and windows).
4. Short Term Car Insurance
Short-term car insurance provides cover in a range of different circumstances including emergencies and when it’s convenient to be insured for less than a month or so.
If you are purchasing a new car, short-term cover may provide you with the opportunity to test-drive the vehicle or, if you’ve already bought it, to drive it home legally.
If something happens and you cannot drive your own vehicle, short-term car insurance may be required to allow you to take control of a courtesy car or a privately obtained extra vehicle.
5. Pay as you go Car Insurance
A relatively new introduction to the range of policies available, pay-as-you-drive is based on global positioning systems (GPS) and tracks where and when you drive your car. Insurance premiums are usually charged by the mile at different rates depending on the time of day and the class of road on which you drive.
For example, a car driving in the rush hour every morning might be charged more per mile than one driving on an empty motorway in the middle of the night. Insurance companies say this is a good option for those who don’t drive often or who only drive at off-peak times, as it may be able to save money overall.
Important Comments
The demise of Norwich Union’s pay as you go car insurance scheme is “a blow for younger drivers”, one expert has claimed.
Peter Gerrard, head of insurance research at moneysupermarket.com, explained that the “innovative” form of protection was good for those who were willing to curb their driving habits for cheaper premiums. Read Full Article
6. Female Car Insurance
With women statistically less likely to have an accident, a number of female car insurance providers have started offering policies just for the girls.
Companies such as Diva or Sheila’s Wheels provide policies which may be cheaper than those sold by unisex firms.
Sheila’s Wheels, for example, says it will extend cover to include your spouse, so it may be cheaper for a couple to insure their car in the woman’s name and take advantage of the lower premiums.
7. Student Car Insurance
Because a student is normally a young person they typically pay a higher premium for car insurance.
Students should consider the options on what type of car insurance policy to have. Overall there are 3 main types of car insurance: Third party only insurance, third party fire and theft and fully comprehensive.
8. Young Driver Car Insurance
If you are a newly qualified or learner driver (provisional licence) with a you have probably discovered that it is difficult to find cheap car insurance.
How young driver can reduce car insurance premium?
The following tips will help you reduce the cost of young drievsr car insurance.
- Take the Pass Plus Driving Exam -The pass plus examination is for new and young car drivers. It is an intensive training course that helps new drivers become a better drivers. Pass the pass plus and you will get a discount of up 35% on your car insurance. Taking the Pass Plus will cost around £100 but given the high cost of new drivers car insurance you should save more than this on your car insurance premium. Ask your driving instructor for details.
- Pay a Higher Excess -Insurers will insist on a minimum amount that you have to contribute to any car insurance claim. The standard amount is £100. As new and young drivers if you volunteer a higher amount you could save on your car insurance premium.
- Pay Your Car Insurance Premium in One Go – It is often cheaper to pay your years car insurance in one lump sum rather than in monthly installments. Most car insurance companies charge interest of around 15% APR (some up to 30%) to allow you to pay your premium in monthly installments.
- Named Drivers – Adding a named older driver to your car insurance policy, i.e. your parents, can save you 10% on your insurance premium. Likewise, avoid having younger named drivers on your policy.
- Car Security – Beef up your car security. Thatcham approved car alarms are recognized by all insurers and most will discount your premium if you have these fitted. If you have a garage then use it. Your car is less likely to be stolen from your garage or from your drive than if it is parked in the street. Insurance companies will recognize this and offer cheaper premiums.
- Buy Your Car Insurance Policy Online – Most car insurance companies offer a discount if you buy online via their web site.
- Be Born Female – Female car insurance is cheaper. Why? Because the average female is a safer driver than the average male. Result, cheaper car insurance for the ladies.
- Shop Around – According to the Association of British Insurers it is possible to save 35% on a car insurance premium by simply comparing several insurance companies against each other. As young drivers such a discount can be considerable. So get as many insurance quotes, online or otherwise, as you can. It will save you money.
9. Grey Import Car Insurance
If you have a car that is not built and designed for the UK market then you must look to a specialist company to provide your car insurance.
In order to classify your car as a grey import it must have no British equivalent. Many of the bigger companies offer this kind of insurance, but its worth checking before you ask for a quote.
Grey Import Car Insurance Guide by Norwich Union
We offer insurance cover for a number of imported cars to provide our customers with the flexible motor insurance cover they need.
Conditions applying to imported cars
In order to take out our grey import car insurance your vehicle must:
o Have been manufactured from 1993 onwards
o You must have either category 1 or category 2 Thatcham security fitted to your vehicle – this will be clarified when you get your quote.
Grey import cars which are not covered
We are unable to provide car insurance for the following imported cars:
- BMW Alpina
- Hummer H1
- Hummer H2
- Isuzu Vehicross
- Nissan Skyline
- Nissan Figaro
- Renault Twingo
- Toyota Altezza
- Toyota Soarer
If your vehicle is made by Opel, you may use the manufacturer name “Vauxhall” to obtain a guide import car insurance quote online.
Most Popular Car Insurance Questions
Do I Need Car Insurance?
Yes. It’s the law. The UK Road Traffic Act legally binds all motorists to take out insurance against their liability for injuries to drivers and passengers and for damage to other’s property. It is a serious criminal offence to drive your car or allow others to drive it without insurance which could land you in prison, especially if you are involved in an accident. The minimal legal requirement in the UK is Third Party insurance, this insures against loss and injury to others. Remember, driving without insurance is a big mistake.
Can I get a quote if I do not have a registration number?
Yes. We know that there are circumstances where you will not have the registration number, for example where you are thinking of changing cars and would like an indication of the likely premium.
Therefore you can obtain a quotation by simply selecting from our list of cars. However, should you decide that you want to buy a policy the registration number will be required.
How many car insurance quotes should I get?
It is always wise to get several quotes from various sources – don’t assume that because a car insurance broker approaches different insurance companies they’ll come back with the cheapest quote possible – there are many different relationships between brokers and insurance companies and premiums DO vary accordingly. Shop around and you may find two different quotes for exactly the same policy from exactly the same insurance provider.
You may even want to approach several brokers and the insurance companies themselves directly. It can’t hurt to be too careful if there is a good bit of money at stake. We would suggest trying at least five different sources.
Why is car insurance for young drivers so expensive?
This is perfectly natural, perfectly obvious and perfectly acceptable. Just going by statistics, young drivers have more accidents and make more insurance claims than older drivers. It goes without saying that insurance companies will up their premiums to reflect this unavoidable fact.
The younger driver will therefore need to think carefully and go for a sensible choice of car – rule out the turbo-charged performance car option, start from a low insurance group and start building up a no-claims record. That, as much as anything, will help to bring down the cost of the premium. Don’t go for body kits and other shiny modifications either – these must all be declared and can add a hefty amount onto the final bill.
They may also want to consider eschewing the comprehensive cover if the car is old and inexpensive – third party car insurance will not cover the cost of the car in the case of an accident but if the car only cost a few hundred pounds in the first place, this is not such a bad deal and will lower your outlay.
Another option is to apply for a limited mileage cover policy. If you only need a runabout for a couple of days a week, this can also save you a fair bit of money.
What Other Ways Can I Reduce The Cost Of My Car Insurance Policy?
At the end of the day the lower the risk of theft, damage or injury then the lower your insurance costs will be. The following are ways which will reduce your insurance bill and keep your low claims bonus down.
Security – Ensure your vehicle is protected with the latest security equipment. Alarm systems, trackers and immobilisers will all reduce your bills. Find out from your insurer what car security products they will offer you reductions for if you install them.
Low Mileage – Work out your annual, monthly, weekly mileage as accurately as you can. If you drive low miles then tell your insurer as your premium will be lower. If you can reduce your mileage you will save money. Anything that lowers the risk of accident will reduce your premium.
Build A Garage – The use of a drive and/or a garage will reduce your insurance bill considerably as it is seen as a major deterrent to vandalism and theft. Garaging your car when not in use keeps down your insurance bill. Similarly, if you have a drive it is best to use it. The lower the risk, the lower the insurance cost.
Learn To Drive – Drive safely. Keep to speed limits, thereby reducing the risk of accidents as well as speeding fines which will push up your premium. The UK Institute of Advanced Motorists offers advanced motoring qualifications which will result in cheaper deals from insurers.
Change Your Address – Where you live affects your bill. The density of traffic and crime rates varies a lot from postcode to postcode and so affects your premium. Unfortunately, inner city postcodes tend to attract high premiums.
Multiple Cover - Most UK car insurers will also offer different insurance services such as home insurance and travel insurance. If you buy different policies from one insurer some firms will offer discounts on your bill. The right combined offer can be more convenient as well as saving you money.
Multiple Cars – Similar to multiple insurance contracts you may save money if you insure your multiple cars with the same company. You may find you will obtain better deals if you obtain single quotes for all your vehicles. If you have more than one car this is also convenient when it comes to paying your bill and obtaining information.
Don’t Modify - Avoid modifying your car if you want to keep your premium low as it will normally lead to an increase in your insurance bill. Check with your insurer before going ahead or seek a specialist insurer to see what alternative deals are on offer. Likewise, if you are buying a kit car obtain advice in advance and consult a specialist insurer. Car clubs are also a good point of contact for advice
Why is it difficult to get import car insurance?
Well, this isn’t strictly true. Where an imported car is kitted out to UK spec, that is, where you would get exactly the same car from a UK dealer as the one you are importing, then there is absolutely no problem. The problems occur when you attempt to get car insurance for a vehicle which was not meant to go on sale in the UK; even when they look very much the same, some manufacturer’s cars are markedly different with regards to components under the hood. From the insurer’s point of view, getting replacements for certain car parts from abroad can be time-consuming and costly; engineers may not be certified or familiar with certain aspects of the vehicles and so on. Naturally this all leads to much greater expense for the insurers and as they seem to prefer avoiding even the faintest possibility of relinquishing more money than necessary, they will be wary of cutting an insurance policy deal in these instances.
Useful Car Insurance Websites
- Auto Trader Car Insurance
- Norwich Car Insurance
- Zuric Car Insurance
- Confused.com
- Moneysupermarket.com
- Moneyexpert.com
- Churchill Car Insurance
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