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Do I have to have car insurance?
Do I need car insurance?
What types of car insurance are there?
What types of specialist insurance policies are there?
What factors will affect the cost of my insurance?
How do I keep my insurance cost as low as possible?
Since the 1930s is has been a legal requirement for all drivers to purchase car insurance. Car insurance is a legal requirement because cars have the capacity to seriously damage property or injure people and you need to be insured to pay for any accidents you cause.
Your insurance will not only cover the costs brought on by injuries or damage to other people and their cars but also to injuries and damage to you and your car.
The government will punish anyone for driving without car insurance and punishments can be a fine, ban, disqualification from driving, having your car crushed or criminal conviction. Top
Accidents are frequent on the road and your insurance is designed to protect you from their financial costs. According to the Association of British Insurers (ABI) in 2006, the insurance industry paid out over £18.7 million in private motor car claims, with more than one in six private car drivers making a claim each year.
If you cause a collision while driving uninsured, you will not only have to cope with the costs of your damaged car or injured person but you can be held legally responsible for the cost of providing care and compensation to anyone injured or for any property you damaged. Any property you own could be taken and sold to pay for these costs.
After your home, your car is probably your most expensive purchase. Damage caused by or done to your car could be financially crippling, so not only is it a legal requirement but insurance offers you peace of mind that should an accident occur you are protected. Top
There are three common types of car insurance and each offers a varying level of cover. They are: third party, third party: fire and theft, and comprehensive.
Third party insurance covers the minimum required by law. It pays compensation to anyone else who was injured or had their car and property damaged.
Third party: fire and theft insurance offers all of the protection that a standard third party policy does but also pays out compensation for damage done to your car by fire or theft.
Comprehensive insurance offers the same level of protection as fire and theft but also protects you against accidental damage. Comprehensive cover usually covers personal belonging in the car as well.
Some types of insurance will cover you even if you are driving another person’s car, with their permission of course. The coverage, however, will probably be limited to third party insurance even if you have a comprehensive policy for your car.
Your policy may also cover your for any legal expenses as standard or as an optional extra. Legal expenses insurance covers the cost of legal advice and the legal costs of pursuing action arising from a collision. Top
Depending on your circumstances or type of vehicle a specialist policy may be best. These policies are: classic car insurance, motorcycle insurance, commercial vehicle insurance, senior car insurance, women only car insurance, young drivers car insurance and GAP insurance.
Young drivers insurance: A young driver qualifies as anyone below the age of 25. Young drivers are considered riskier and more likely to be in an accident than other drivers. As such, insurance for young drivers is usually very expensive and some insurers are offering discounted rates by stripping away certain features. In the event of an accident you may not be given a temporary car, you may not be able to protect your no claims bonus and you may have to pay a larger amount if you cause an accident.
Classic car insurance: Classic cars are rare and expensive and often considered very special to their owners. Classic car insurance is designed to cope with the high value of these cars and has a different levels of coverage for classic cars, vintage cars and veteran cars.
Women car insurance: Women are generally considered better drivers than men. They get in fewer accidents and those accidents tend to be less costly than their male counterparts. Because of the above reasons, women drivers are often offered special discount rates.
Commercial car insurance: Many companies own cars which their employees use on a regular basis. The company itself is responsible for the car and is usually held liable for any accident that occurs, and because of this it is important for companies to insure all their vehicles. Commercial car insurance is intended to insure vehicles that have multiple drivers and specialist cars.
Senior drivers car insurance: Divers between the age of 50 and 70 are generally considered the safest of all drivers. Drivers in this age group are also considered to have considerable driving experience and are viewed as less likely to make a mistake. Many insurers offer a discounted rate and some even specialise in older drivers only.
Motorcycle insurance: If you own a motorcycle and intend to use it on the roads you have to purchase insurance just like you would a car. The types of cover are just like that of normal car insurance but the premium is usually much higher as motorcycles are considered a high risk vehicle. Some insurers will not cover motorcycles but others specialise in that area.
GAP car insurance: If you have a policy out on your car that protects it from damage or theft you will be given its market value to aid you in buying a new one. You car, however, may have depreciated considerably and the sum you receive to replace the car may be far less than the sum you paid for it. This may not be a problem if you have already paid for your car but if you are paying in instalments then you may find yourself stretching to cover the cost. GAP insurance is designed to protect you from this by paying you a certain sum extra to cover any ongoing payments or pay you the full amount that the car was worth when you bought it. Top
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Insurers will take into account a number of facts about you before setting the cost of insurance. Cost can vary according to age, experience, previous claims and the cost and type of the car itself.
Your age is probably the most important factor an insurer will consider, the younger you are the higher your premium will be. The ABI says this is because young drivers are twice as likely to make an insurance claim and the average claim made by younger people is up to three times more than that made by other drivers. Top
Discounts on certain policies may be offered if your car has additional security features. These range from simple wheel locks to vehicle tracking systems. Storing your car in a garage may also lower the costs.
Many insurers will also use the mileage of a car to set the premium. Drive less often and the premium could be lowered.
Insurers will almost certainly take your previous claims record into account and offer substantial discounts to drivers with a no claim record. Top
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