Car insurance is there to give you financial protection in the event of an accident whether or not you are responsible for it. You must factor-in car insurance as part of your motoring expenses. A car insurance policy will provide you with much needed protection against financial losses incurred because of traffic accidents.
Not all insurance policies cover you against damage to your own vehicle, or liability for property damage or legal fees. Bolt-on niche insurance products such as inconvenience cover, gap insurance and even legal protection insurance can prove to be invaluable additions to your comprehensive car insurance to ensure an accident does not end up costing you more than you can afford should the worst happen.
Choosing the right car insurance will protect not only you, but your vehicle, and third parties in the long run. If you are planning to drive in the UK, you are required to purchase car insurance. Your insurance company will cover you at a level determined by the type of policy you choose.
WHY YOU SHOULD SHOP AROUND FOR NEW CAR INSURANCE
Shopping around for car insurance is very important for several reasons:
• You may find better quotes
• Effects of car depreciation
• A change in personal circumstances
• Car financing could put you and the car in a higher risk category
• It may be possible for an insurer to cover the loss of certain personal effects
• A different insurer may include breadown cover in your policy
• You may find inclusive legal cover offered by some insurers
• It may be possible for an insurer to also cover a second car
• You may be offered an introductory discount
Just because you have used the same insurance company or insurance broker for several years, does not mean you are getting the best deal. It doesn’t always follow that the same company or broker can offer you the best deal for your insurance.
An insurance broker already familiar with your demands and needs from your insurance history will probably be in a position to get you the best deal. They may be able to consolidate those demands and needs into a package which often will only be available via a broker.
Car depreciation is a direct result of a vehicle’s age and usage. No sooner than you have driven your new car off the showroom floor the car begins to depreciate. For every year that you own a car it will decrease in value. You should therefore insure accordingly by adjusting your car’s declared value at renewal time. This is an obvious statement but can be surprisingly often forgotten. So always ask your broker to check the value of your car against its blue book value, rather than the purchase price. The reason is that even fully comprehensive car insurance policies do not cover a vehicle to the purchase price, but rather the blue book value. So ensure you are as accurate as possible when declaring the car’s value. If you have bought an expensive car, then the chances are that it will cost you more to insure. You may be lucky enough to find a policy which offers to replace your car with the same of similar following an accident, but this is not usually the case. There is however an insurance product called Vehicle Replacement Insurance which does just that! To find out more about how Vehicle Replacement Insurance works click on the link.
At the time of your last renewal your circumstances may have been different. Perhaps you do not drive as far or often as you did, or perhaps your children have grown and want the keys to the car. Allow your insurance policy to reflect these changes by renewing accordingly. Insurance companies lower their prices for low mileage drivers and discounts can be significantIf you wait until renewal time it probably won’t be that expensive to add additional drivers to your car insurance policy. By waiting until renewal time you may be able to avoid the administration costs of adding extra drivers.
WHICH LEVEL OF COVER SHOULD I CHOOSE FOR MY CAR INSURANCE?
In the UK, there are three types of vehicle insurance.
1. Basic Third Party Insurance is mandatory in many countries, including the UK. This type of cover insures a vehicle and driver against damage to another person’s car, driver or passengers if involved in an accident. This type of insurance covers your liabilities in the event of damage to another vehicle or person in an accident. This does not cover any damage to the vehicle or the driver of the vehicle. Third party insurance will not cover any necessary repairs made to your car.
2. Third Party, Fire and Theft Insurance will cover the benefits of third party insurance and includes any financial loss to the insured vehicle caused by fire or theft. The average driver may find this the best type of cover, especially for a vehicle which doesn’t have a very high market value. You must have a fully comprehensive policy for a leased or financed car.
3. The widest coverage is provided by a Fully Comprehensive insurance policy – or “fully comp”.Damage to your car, and personal injury caused by an accident, as well as the basics of third party, fire and theft, are covered by a comprehensive car insurance policy. If the vehicle value is higher than the insured can afford to pay to replace it, then fully comprehensive is the preferred choice. Search on-line for products like Vehicle Replacement Gap insurance or Finance Gap – these will close the gap between what your payout would be and the cost of buying a new car in the event of an insurance write-off.
Many factors affect car insurance and most insurance companies offer a range of secondary covers to meet the varied and specialized needs of the policyholder.
FACTORS AFFECTING CAR INSURANCE
1. The Policyholder
• Age of the policyholder
• Insurance companies favour woman policy holders
• Your marital status
• Inner city, suburban or rural residential locations
• Engine and car size
• How much your car will cost to replace
• Any modifications that have been made to the vehicle by its owner
A younger less experienced driver will pay a higher insurance premium than someone with several years driving experience.
A married person is considered more responsible for their actions than a person is with no commitments. It stands to reason that married men with kids have more responsibilities than single men and the insurance companies therefore consider married men a lower risk category.
Where a person lives also affects the insurance cost. Rural areas that have less traffic and areas with a lower crime rate will mostly likely get a better premium than towns or high crime areas.
A powerful car is more likely to lose control at the hands of younger drivers: expensive cars cost a lot to replace if scrapped and should they simply require repairs the sum of the replacement parts often costs more than the used car’s value, making more powerful cars very expensive to ensure.
Modifications are more likely to alter the vehicles safety; performance is improved, and handling may be compromised making the vehicle more unpredictable. These factors translate to increased risk for insurance purposes, and premiums will increase as a result.
2. Driver History
• Years of driving experience
• Historical claims
• History of driving convictions
• Annual mileage
The number of years a person has been driving suggests their understanding of the rules of the road, shows the driver has built up experience of driving under varied driving conditions and has attained a certain level of confidence while behind the wheel. This is confirmed or denied by the number of insurance claims made during the previous five years. Driving convictions such as speeding, hazardous driving or driving while intoxicated will affect the premium. Most parking violations are not taken in to account.
Annual mileage is a factor too. The more time the car is on the road, the greater the risk of having an accident.
3. Vehicle History
• Current vehicle value
• Is the car owned, leased or financed
• Car make and model
• Engine size and performance
• Modifications to the vehicle
If the vehicle has a low book value, it may not seem to be cost effective to pay for comprehensive insurance; however this is not necessarily the case. Often as the named driver with many years of no claims under the belt, fully comprehensive motor insurance could cost no more than third party insurance, but with additional perks. When buying on-line you may find that additional benefits can be included at little increased cost to you. Leased or financed vehicles require comprehensive insurance. This is so that they can be reimbursed for any damage caused to the car by the policyholder. This will be covered if you have fully comprehensive insurance.
There may be other benefits included in your car insurance policy, which are not always necessary but sometimes advisable:
• Breakdown insurance
• Provision of a courtesy car while yours is in the garage
• Roadside and/or breakdown insurance cover
• Some insurers may offer you legal cover included in your policy
• Windscreen cover – repair or replace
• No Claims protection
• Compulsory or voluntary deductible amount
Choosing the correct insurance and getting the best quote can be daunting as there are so many variables to consider. An easy to follow quote engine will get the right quote quickly and easily. An insurance aggregator website is a good place to get you started. The average insurance buyer finds aggregator websites easy to use. As the buyer you only need to answer the questions once and they will search the insurance market for you. After the site has collected the quotes, you can then compare different policies, as well as being able to save your quote, amend your requirements if necessary and if you are happy you can then buy on-line. Before you commit to a purchase it’s a good idea to first tell your broker the results of your search to see if he can get you a better deal. Remember that you need to compare quotes on a like-for-like basis. It could be more complicated than you at first think. Good luck on finding the best policy for your needs.
May 18th, 2010 
youhan 
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