Car insurance protects you and your family financially if you ever have a motor accident, be it your fault or not. 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.
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 product will protect you, your vehicle, and other parties in the long run. If you want to drive a vehicle in the UK, you must prove that you have a valid car insurance policy. 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
• Your circumstances may have changed
• Financing could place your car in a greater risk banding
• It may be possible for an insurer to cover the loss of certain personal effects
• Some insurers may include breakdown cover
• Some insurers may offer you legal cover included in your policy
• 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. All it really means is that you have used the same insurance company or insurance broker for the past several years.
A good insurance broker is most likely to get you the best coverage if they manage your full insurance portfolio as they then know your history and needs. 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 may seem obvious but people often neglect to do this. For this reason you should make sure that you have your assumed car's value checked against its current blue book value as opposed to against the purchase price. This is because even fully comprehensive policies will only cover a vehicle to its blue book value rather than its purchase price. So ensure you are as accurate as possible when declaring the car's value. Generally speaking, a more expensive car will cost 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.
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. Get insured according to any changes in circumstances - no matter how small you think they are. Lower mileage drivers can get significant discounts from insurance companies. If 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.
SO WHICH IS THE BEST CHOICE OF CAR INSURANCE COVER?
Insurance cover in the UK falls into three different categories.
1. In many countries including the UK, Third Party Insurance is mandatory. It provides coverage to any third party involved in an accident with the insured vehicle including passengers. 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. "Fully Comp" will give you the widest insurance cover for your vehicle. 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 the vehicle value is higher than the insured can afford to pay to replace it, then fully comprehensive is the preferred choice. There are specialised insurance products like gap insurance cover, finance gap and contract hire 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
• Insurance companies favour woman policy holders
• Marital status
• The area you live in
• How big the car is
• The cost of replacing the vehicle
• 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. If you live in the country or in a low crime rate location you are likely to get a lower premium than if you are a city-dweller.
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. The insurance company therefore sees these factors as an increased risk and will increase their premiums 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. The number of insurance claims made in the previous five years will either confirm or deny these assumptions. Driving convictions such as speeding, dangerous driving or drink diving will affect the premium. This does not include parking violations.
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
• Owned, leased or financed
• Make and model of the vehicle
• 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. 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. 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. This is so that they can be reimbursed for any damage caused to the car by the policyholder. 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 or breakdown cover
• Legal assistance
• Windscreen replacement
• 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. Minimise your aggravation by only visiting user-friendly insurance sites. It is a good idea to consider using an insurance aggregator website to get started. They are fairly easy to use. As the buyer you only need to answer the questions once and they will search the insurance market for you. 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. It's always a good idea to find out if your broker can get you a better deal first, so keep him posted on your findings. 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 your ideal car insurance.
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Article Source: ArticlesBase.com - A Closer Look At Motor Insurance
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