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Car insurance is there to give you financial protection in the event of an accident whether or not you are responsible for it. In the UK, car insurance is a compulsory as well as a necessary expense. You need a good car insurance policy for the financial protection it will afford you in the event of an automobile accident. 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 plan to drive, you must be able to prove that you have purchased car insurance. The type of car insurance cover that you choose will determine the level of protection that your insurance company will give you. 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 • Depreciation will affect the value of your car • A change in personal circumstances • Your car finance may put your car at risk • Personal effects loss may be covered by some insurers • You may find inclusive breakdown cover • You may find an insurer offering inclusive legal cover • 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. If your broker manages your entire insurance portfolio then he is in the best position to get you the best deal, as he already has information about your demands and needs. They may be able to consolidate those demands and needs into a package which often will only be available via a broker. Your car will depreciate in value according to both age and usage. Car depreciation starts as soon as you drive it away from the car dealership. Your car’s value will decrease every year. Make sure that your insurance policy reflects this reduction in value. This is logical but often people can overlook the obvious. Check the value of your car against its blue book value rather than the price you paid – your broker can do this for you. This is because even fully comprehensive policies will only cover a vehicle to its blue book value rather than it’s purchase price. Your declaration concerning the value of the car should be as accurate as possible. 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! Finding out more about vehicle replacement insurance is easy, just click on the link. Your personal circumstances may be different that at your last renewal. 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 significantAdding additional drivers is not as expensive as you would think; a great tip here is to wait until renewal time if possible. Insurers may charge you an administration cost for adding additional drivers, but if you wait until it’s time to renew you may not incur this fee. 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. If you are involved in an accident, this type of cover will protect you financially against damage to the other vehicle or its occupants. 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. This type of insurance will not cover repairs to your vehicle. 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. A leased or financed vehicle will require a fully comprehensive insurance cover. 3. “Fully Comp” will give you the widest insurance cover for your vehicle. It provides the basic insurance of third party, fire and theft and covers damage to the insured vehicle and any bodily injury suffered by the policyholder in an auto accident. If the vehicle value is higher than the insured can afford to pay to replace it, then fully comprehensive is the preferred choice. The gap between what your insurance payout would be and the cost of buying a new car can be bridged with specialised insurance products like Finance Gap Insurance or Vehicle Replacement Gap Insurance – you can easily find out more about these products by going online. There are lots of factors affecting car insurance and most insurers offer secondary products which can meet any specialised needs of the policyholder. FACTORS AFFECTING CAR INSURANCE 1. The Policyholder • Age of the policyholder • Men are considered higher risk than ladies • Your marital status • The area you live in • How big the car is • 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 catagory. The location or area of residence can have a massive effect on insurance premiums. 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. A modified car could have had safety compromised in terms of improved performance and different handling which could make the car unpredictable. These factors translate to increased risk for insurance purposes, and premiums will increase as a result. 2. Driver History • Years of driving experience • Previous claims • Any convictions for driving offences • 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. Insurance companies base these assuptions on the poliyholder’s claims history over the last five years. Most driving convictions negatively affect motor insurance premiums for drivers. Parking violations are not included. Your annual mileage is a factor too. The more a vehicle is on the road, the higher the risk for an accident. 3. Vehicle History • Current vehicle value • Is the car owned, leased or financed • Vehicle make and model • Performance level and size of engine • 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. If the named driver has several years no claims then fully comprehensive insurance could actually cost the same as third party fire and theft cover, but with additional perks such as windscreen cover and legal assistance etc. Many online insurance buyers find that for just a small premium increase, many additional benefits can be included. 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 • Legal assistance • Windscreen replacement • 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. The right car insurance price is easy to find when you’re on a great website. A good place to start is on an insurance aggregator website. Aggregator websites are easy to use. They will search the insurance market for you and show you the products which best match you needs based on the answers to some initial questions. Once they have collected all the quotes, you will be able to compare insurance policies against each other, save and email your quote to your personal email address, go back and change your options to include or reduce the benefits you may be considering and – when you’re happy – buy online. Before you buy online, call your broker to see if you can get a better deal based on your findings. It’s important to remember that you should compare like-for-like quotes when looking at different insurers. This may not always be as simple as you at first think. Good luck.