Chosing The Best Motor Insurance Cover
Comments(0) | Tagged auto insurance, car insurance, choosing insurance policy, finance gap, gap insurance, motor insurance, vehicle replacement gap Car insurance exists to protect you financially in the event of an accident, whether or not it is your fault. You must factor-in car insurance as part of your motoring expenses. If you have an accident in your car, you will be glad that you invested in good car insurance for the financial protection that this will give you.
Sadly not all insurances include fixing the damages to your car, protecting against liability, legal fees or damage to any other property involved in the accident. You can buy additional options such as gap insurance, inconvenience cover, and legal protection can be valuable additions to your policy and could protect you against financial losses after an accident.
Choosing the right car insurance product will protect you, your vehicle, and other parties in the long run. If you are planning to drive in the UK, you are required to purchase car insurance. There are different levels of cover which are determined by the type of car insurance policy you choose to take out.
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 • Your circumstances may have changed • Your car finance may put your car at risk • You may be able to cover the loss of personal goods • You may find a policy which includes breakdown cover • You may find an insurer offering inclusive legal cover • You could find a policy which includes cover for 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 really only means just that – you have used the same insurance company or insurance broker for the past several years.
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. This is also the case with car insurance as they can often consolidate your insurance needs into an all inclusive package which most insurance companies only make available to brokers.
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. Every year that you own the same car, its value decreases. You should get a reduction in your premium to reflect this. This is logical but often people can overlook the obvious. So always ask your broker to check the value of your car against its blue book value, rather than the purchase price. This is because even fully comprehensive policies will only cover a vehicle to its blue book value rather than it’s purchase price. So ensure you are as accurate as possible when declaring the car’s value. The more expensive a car is the more it can cost to insure. In rare cases the insurance company may offer a replacement car of the exact model or spec after an accident. 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 car insurance could be affected if your circumstances have changed since 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 significant.You can add additional drivers to your policy for relatively little expense, especially if you wait until it’s time to renew. Adding additional drivers mid-year often incurs administration fees which could be avoided if done at inception or renewal time.
SO WHICH IS THE BEST CHOICE OF CAR INSURANCE COVER?
In the UK, there are three types of vehicle insurance.
1. You must by law have the minimum of Third Party Insurance in many countries, including the UK. It gives you cover against a claim against you for damage to another car, its driver, or passengers should you be in an accident. This type of insurance covers your liabilities in the event of damage to another vehicle or person in an accident. The insured is not protected against bodily injury or damage to their own vehicle with this type of policy. 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. If your car has a low market value, you may find this to be the best type of vehicle insurance. A car which has been either leased or financed must have a fully comprehensive insurance policy.
3. Fully Comprehensive Insurance offers the widest coverage. As well as providing basic cover as in third party, fire and theft, it will also cover vehicle damage and bodily injury sustained in an accident. If your car is worth more than you could afford to replace it, then you should opt for a fully comprehensive insurance policy. There are specialised insurance products like Finance Gap or Vehicle Replacement Gap which can top up the gap between what your insurance company will pay out and the cost of getting a new car – you can find out more online by doing a simple search.
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 • Gender of the policyholder • Marital status • Where the policyholder lives • Engine and car size • Vehicle replacement cost • 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 a married man with children has more responsibilities and the insurance companies will therefore consider this person a lower risk than a single male in his early twenties driving a WRX.
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.
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 • Historical claims • If you have points on your licence • 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. Parking violations are not included.
Your annual mileage is a factor too. The risk of having an accident increases the longer a vehicle is on the road.
3. Vehicle History • Current vehicle value • Owned, leased or financed • Car make and model • Size of engine and performance category • 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. A named driver with several years of insurance cover and no claims against his or her name could find that fully comprehensive car insurance costs almost the same as a lesser level of cover, but with additional benefits such as a free courtesy car etc. When buying online you may find that additional benefits can be included at little increased cost to you. Fully comprehensive insurance cover will be required for leased or financed vehicles. You need to be able to reimburse the leasing or finance company for any damage to the car. Comprehensive insurance will cover this.
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 assistance • Some insurers may offer you legal cover included in your policy • Windscreen cover – repair or replace • NCD 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. Good websites make it easy to get quotes with little aggravation. An insurance aggregator website is a good place to get you started. The average insurance buyer finds aggregator websites easy to use. You’ll only need to fill out one questionnaire so that the market can be searched on your behalf. 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 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. When comparing quotes online, remember to do so on a like-for-like basis. This may not always be as simple as you at first think. Good luck on finding your ideal car insurance.
