What kind of insurance policy is right for you and your car? See which is the best and what factors affect the cost
Whether you're a first-time car owner, or have been on the road for years, making sure you have the right insurance policy for your car could save you big time
DRIVING without insurance is illegal on the UK roads no matter what your circumstances.
And even if you aren't a first-time car buyer, insuring your vehicle can sometimes be confusing, and often leave you paying more than you need to.
We have broken down the different features of the insurance process to help you understand everything you need to know when it comes to being covered when behind the wheel.
What are the basic requirements?
For all drivers, third-party insurance is the minimum level of cover you must have before getting out on the road.
This is because it covers the property of other road users, so they aren't disadvantaged if you cause an accident and can't pay for the damage.
If you are involved in an accident that is deemed to be your fault, third-party insurance covers the cost of repairing the other person's car, as well as any medical expenses they might incur.
This type of cover does NOT cover you or your own vehicle.
Do I need fire and theft cover?
Third-party, fire and theft insurance gives you slightly more cover, but still isn't as safe as having comprehensive insurance.
Policies in this bracket will allow you to make claims if you car is stolen, damaged in an attempted theft, or suffers fire damage, on top of the regular third-party claims.
If you aren't sure whether third-party or fire and theft cover is sufficient for your vehicle, consider its value and the potential cost involved in having it repaired or replaced.
Generally, if your motor is an older, inexpensive model that isn't likely to fetch more than around £1,000 in resale, third-party is probably all the cover you need.
But if you own a newer, more expensive model of car, paying for comprehensive insurance is more than likely going to be cheaper than shelling out for new parts out of your own pocket.
Why should I bother with comprehensive insurance?
Fully comp cover, or comprehensive car insurance, gives you one of the highest levels of protection while out on the road.
While it covers you for any damage to other drivers and their property, fully comp insurance means you and your own car are always protected.
Even if an accident is deemed to be your fault, if you have comprehensive cover, the insurer will pay for your medical bills, as well as repair costs for your car.
A quirk of the industry also means fully comp policies are often cheaper than third party deals.
What about optional extras?
Despite claiming to be "fully comprehensive", that type of insurance often does not include absolutely everything you could be charged for in the event of an accident.
Depending on your insurer, you may need to add optional extras to your policy to cover you completely.
The most common extras are:
- Courtesy car - some insurers may charge more to provide you with a hire car while your own is being repaired.
- Breakdown - usually with a fee attached, some providers will throw it in to sweeten the deal
- Legal expenses - legal expenses are rarely standard inclusions. They prevent you from paying large sums if an accident finds you in court trying to recover repair costs.
- Personal injury - while comprehensive insurance already covers injury to yourself, it is capped at a certain amount. You can increase the expense you are covered for in case of extensive medical bills.
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How do I get a no-claims bonus?
One way you can reduce the cost of your car insurance premium is by using your no-claims bonus (NCB).
A NCB counts the number of years you have been an active driver, and haven't made a claim on your insurance policy.
Insurers will use this record to calculate a discount, or bonus, which will be deducted from your premium.
A driver with a large NCB generally suggests they are a safe driver, which makes insurers more inclined to give them a cheaper policy.
For new drivers, you will have to build up your own NCB bonus by going a number of years continuously without making a claim.
In some cases, insurers may offer a protected NCB, which allows drivers to make a certain number of claims without their discount being affected.
What factors can affect how much I pay?
Insurers take a number of different factors into account when calculating your policy.
Quite often, two people of different age or gender trying to insure the exact same car will be given totally different prices from the same insurer.
This is because there are factors other than the car you drive that determine the amount an insurance company will need you to pay.
The most common factors that can affect cost are:
- Age - This is usually based on accident statistics, with younger drivers deemed "riskier", seeing them pay more for their insurance.
- Location - Depending on where you live, accidents may be more or less common in your area. Living in a highly populated region is likely to bump up your premium.
- Gender - Just like age, this is based on statistics. Men are involved in more accidents globally than women, making them more expensive to insure.
- Claims history - In the same way a NCB can see your policy discounted, a driver with a high number of claims could be charged more by their insurer.
- Previous convictions - If you have previously been found guilty of a driving offence, you are deemed more of a risk to an insurer, and will have to pay out more to be covered.
- Predicted mileage - The more time you spend on the road, the more chance you have of being involved in an accident, which means you'll pay more. Insurers may also take your occupation into account if it means you spend longer in your car.
Can I drive abroad with my policy?
If you wish to drive your car outside of the UK, you need to check your policy covers you for international driving before you go overseas.
In most cases, your insurer will extend your policy to cover you in Europe if you aren't already, however this will generally just be the most basic third-party insurance, regardless of your policy type in the UK.
If your insurer won't extend your fully comp policy for free, you are normally able to pay for an optional extra which gives you cover in Europe.
