Question - Is motor insurance compulsory?
Answer - It is an offence
to use a car on public roads without having insurance to cover your legal liability.
This is in case you damage other people's property or worse, injure others. It
is compulsory under the Road Traffic Act to take out a minimum level of cover,
although it is possible to take out a more comprehensive cover to safeguard yourself
and your vehicle.
Question - What types of motor policy are available
to choose from?
Answer - There are 3 types.
Third party cover
is the legal minimum cover insuring against damage and injuries caused by you
or your passenger to another person or person's property. It does not cover any
injury or damage to you or your car.
Third party, fire and theft,
in addition to third party insurance will also pay for replacement or repair of
your car if stolen or destroyed or damaged by fire.
policies extend third party, fire and theft by covering damage to your own
car in the event of an accident caused by yourself. There may also be extra benefits
with "fully comprehensive" cover, such as windscreen and window damage,
use of a replacement car while yours is being repaired and the ability to drive
another's car. Fully comprehensive insurance covers the car for social and domestic
pleasure, and includes trips to and from place of work. If the car is also used
for occasional or regular business use it is advisable to have additional cover
for this purpose. Accidents that happen while on route to and from a business
venue other than your regular place of work may not be covered under a policy
unless specifically mentioned. In addition, some insurance companies will include
cover for you to drive other cars with the drivers' permission. However, be careful,
as this may only be third party cover.
Question - How do I decide which
policy to go for?
Answer - Fully comprehensive cover is obviously better,
but can prove very expensive for higher-risk or younger drivers. You will need
to consider what your car is worth. Find out the maximum they would pay out if
the car is stolen or becomes written-off. Take into account the amount of any
excess you'd have to pay. You may discover that based on your particular circumstances,
this cover isn't actually that much more expensive.
Question - What
information should I give my insurer?
Answer - It is vitally important
that you tell the insurance company anything that might affect your policy. It
is always better to pay slightly more in premium than to have an accident and
have your claim disallowed through failure to disclose information. Always notify
changes in circumstances e.g. change of address or car, as failure to do so would,
again, invalidate you're policy.
Question - What is a no-claims discount?
Answer - No-claims discounts (NCD) mean you have a reduction on the premium,
based on your driving experience and claims history. This can vary from 30% up
to 65%, making a substantial saving for drivers who have remained claim free over
a period of years. However, your entitlement to no-claims discount can be lower
if a claim is made and the policy does not have a protected no-claims discount.
Question - What is a protected no-claims discount?
For an additional premium you have choose to protect any no-claims discount you
may have built up. This additional protection means that if you have an accident
and plan to claim against your policy, your insurer will allow the claim without
it affecting your no-claims discount when you next renew your insurance.
- What is Uninsured Loss Recovery (ULR)?
Answer - In many cases when
accidents occur, there are costs that have to be incurred by yourself, even if
you were not to blame. These costs include any excess related to your policy,
or claiming against someone who does not have insurance. ULR is the legal service
that claims back these sums on your behalf, which means you receive back most,
if not all, of any costs you may have incurred. The service also covers the pursuit
of any damages to yourself should you be injured in an accident.
- Why are car insurance premiums so high for younger drivers?
- Premiums are based on age and experience and younger drivers have to build up
both in order to qualify for lower premiums and NCDs. Newly qualified drivers
have an opportunity to reduce these premiums by increasing the amount of voluntary
excess and gaining driving experience. Taking a "Pass
Plus" course, run by the Driving
Standards Agency can reduce your premium by the equivalent of one years no-claims
discount. It is also possible to take an Advanced Driving Test (run by the Institute
of Advanced Motorists) which some insurance companies will take into consideration
when calculating premiums.
Question - Female drivers are safer than
Male drivers, so can they get a better deal on car insurance?
- Premiums can be lower for Females. Some Insurance Companies specialise in Insuring
Female drivers - check here.
- How can I keep my premium costs down?
Answer - There are a range of
possible options, depending on which insurer you use. Limiting the policy to named
drivers only and paying a voluntary excess i.e. paying the first £250 of a claim,
instead of the first £100. The installation of immobilisers, car alarms, low annual
mileage and parking the car on a driveway or in a garage overnight all contribute
to reductions in a premium.
Question - How do I choose between the hundreds
of Insurance Companies out there?
Answer - Most of the cheapest quotes
come from direct insurers who sell via their websites. However the cheapest is
not always the best. Quality service and convenience can be as important as price,
especially if you have to make a claim. Look for a company who can offer you a
wide range (i.e. branch, telephone and internet access). This allows you to choose
how and when to hunt for quotes. Alternatively you could use a broker, or a company
that offers the services of a panel of insurers. Both will find the cheapest quote
matching your needs and saving you the effort of several telephone calls or tramping
Question - Am I covered if I take my car abroad on holiday?
Answer - You'll find that most UK car insurance policies extend to the
European Union countries. However, you may find that this cover is for a limited
time and you will need to notify your insurance company if you wish to extend
this period. Occasionally, an additional premium is required but this varies depending
on insurer. You will also need to check the level of cover while abroad as your
policy may state that the policy only extends to the minimum required by each
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