Insurance, just the word can make most people shrink away in fear... it costs money..... it doesn't do anything.... there are so many types.... what if I don't get a free Meerkat with it?
So lets skip all the fluffy toys and screeching singers and dig a bit deeper into the realms of Car Insurance!
Insuring your car is a legal requirement, but like most things in life, it seems to cost much more for the cover than the perceived benefits of the coverage.
Car insurance as we know it today became compulsory in 1930 as part of the first government issued "Road Safety Act" and meant that the owner/drivers of the vehicle had to be insured for Third Party injury.
There are 3 main types of car insurance now available.
Third Party: This basic policy does not cover the driver or any damage to their vehicle. It does cover their passengers and other people/property which may be hurt or damaged.
Third Party Fire and Theft: As above with the inclusion of coverage if the car is stolen or catches fire, in some cases this type of insurance is almost as expensive as the "comprehensive" cover listed below due to people who intentionally set fire to their car or declare it stolen incorrectly.
Comprehensive: Usually the most expensive of the 3 types, this covers everyone involved in the accident, including the driver/owner, passengers and third parties, as well as damage to the owners car, hence the name comprehensive.
You may have read in the news about younger drivers being offered very large quotes, sometimes thousands of pounds per year, to insure their cars. So how do insurance companies come up with these figures, while adverts for "older drivers" offers them much cheaper quotes by comparison.
Insurance premiums of all kinds are based on risk, and given the high percentage of accidents involving younger drivers, as well as their lack of experience(especially compared to someone over 40 for example) it is easier for insurance companies to justify larger premiums as they are required to foot the bill for the repairs.
Other factors are also risk assessed before an insurance quote is given, these may include
Your address: Living in a quieter neighborhood may reduce your quote especially if you park it in a garage, which bring us nicely to;
The make and model of the car: Cars with a bigger engine, more power or more "toys"(sat nav, big stereos etc) might be more expensive for the insurance company to fix, or be more likely to be stolen, think carefully if you really need a 4-wheel drive turbo to drop the kids at school and go shopping.
Where is the vehicle kept overnight: Don't be tempted to tell your insurer "its in the garage" every night if its not, but if it is off the street, keep in a driveway, or in a secure location, this might bring down your quote.
Occupation: Higher risk occupations, such as tradesmen may notice an increase in their quote compared to someone with a job in an office.
Annual mileage: The more miles you drive, the more likely you are to be involved in an accident, think carefully about how much you use your car and give a reasonable figure.
No Claims Bonus(NCB): This will begin to build up when you get your own insurance policy and in some cases can be "protected" so that if you make a claim the NCB will not be lost. Generally one years NCB is worth a 10% discount on your insurance premium, 2 years 20% and so on.
Excess: This is an amount that, if you make a claim on your insurance, you agree to pay towards the costs. Some insurers will have a minimum amount based on age, or experience, £150 for example, and may increase it if you have a powerful or expensive car. You can also choose to add more to the excess, called a Voluntary Excess. which normally reduces your quote further.
There may be other factors which affect your final quote from the insurance company, be sure to tell them if you are not sure about anything, as any incorrect information can mean your insurance is no longer valid.
So where can you buy your car insurance policy?
There are hundreds of insurance companies out there, and they all want your business. It pays to shop around for the best quote, comparison sites are always a great way to get lots of quotes, but contacting insurers directly can sometimes give you a cheaper quote for the same coverage. Shop around and don't forget to write the details down about the price, type of cover and any excesses included in the policy.
Oh and if you don't want your free Meerkat, send it to me!
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