Car Insurance - Cheap Is Not Always Better!

Choosing The Best Motor Insurance Cover

Car insurance exists to protect you financially in the event of an accident, whether or not it is your fault. It is a mandatory and necessary expense if you own or drive a motor vehicle. You need a good car insurance policy for the financial protection it will afford you in the event of an automobile accident. I always check my car warranty too, this also helps save money in the long run.

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. Bolt-on niche insurance products such as inconvenience cover, rti 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. You must prove that you have bought car insurance if you plan to drive in the UK. 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? You may have a change in circumstances? Financing could place your car in a greater risk banding? You could find a policy which includes cover for loss of personal items? You may find a policy which includes breakdown cover? You may find inclusive legal cover offered by some insurers? 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 doesn't always follow that the same company or broker can offer you the best deal for your insurance.

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. They may be able to consolidate those demands and needs into a package which often will only be available via a broker.

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. Your car's value will decrease every year. You should insure accordingly by getting the same coverage at a lower price. This makes perfect sense. So always ask your broker to check the value of your car against its blue book value, rather than the purchase price. The reason is that even fully comprehensive car insurance policies do not cover a vehicle to the purchase price, but rather the blue book value. Ensure you declare the vehicle's value accurately. Generally speaking, a more expensive car will cost more to insure. The exceptions to this rule may be when an insurance company offers to replace your car in the case of the accident for the exact same car or new car of same specification, but this is rare and the chances are that this will not be the case. There is however an insurance product called Vehicle Replacement Insurance which does just that! To find out more about how Vehicle Replacement Insurance works click on the link.

At the time of your last renewal your circumstances may have been different. You may have switched jobs and not drive as many miles per year or have paved the front lawn and turned it into off-street parking. Get insured accordingly. 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. Adding additional drivers mid-year often incurs administration fees which could be avoided if done at inception or renewal time.

WHICH LEVEL OF COVER SHOULD I CHOOSE FOR MY CAR INSURANCE?

There are three different types of cover available in the UK.

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. The insured is not protected against bodily injury or damage to their own vehicle with this type of policy. 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. If your car has a low market value, you may find this to be the best type of vehicle insurance. If you are leasing a vehicle or have acquired it via a finance company, then you will need to provide fully comprehensive insurance for the vehicle.

3. A Fully Comprehensive policy will give you the widest range of cover. 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. 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? Whether you are male or female? Are you married or single? Rural or Urban? 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 category.

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 cars 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. Car modifications therefore equate to increased risk for insurance companies, and will result in increased premiums.

2. Driver History? Years of driving experience? Claims history? History of driving convictions? 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. Certain assumptions and associated levels of risk are made according to the number of claims made in the previous five years. Driving convictions such as speeding, hazardous driving or driving while intoxicated will affect the premium. This does not include parking violations.

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? Whether you own the car or if it is leased or financed? Make and model of the vehicle? 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. Often as the named driver with many years of no claims under the belt, fully comprehensive motor insurance could cost no more than third party insurance, but with additional perks. When buying online you may find that additional benefits can be included at little increased cost to you. It is mandatory for a leased or financed vehicles to have fully comprehensive insurance. You need to be able to reimburse the leasing or finance company for any damage to the car. 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? Courtesy vehicle? Roadside or breakdown cover? Legal assistance? Repair or replacement cover for windscreens? NCD protection? Compulsory or voluntary deductible amount?

Choosing the correct car 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. Consider using an insurance aggregator website for your initial quotes. Aggregator websites are easy to use. You only need to answer the questions once, and then they will select products to show you based on your answers. After the site has collected the quotes, you can then compare different policies, as well as being able to save your quote, amend your requirements if necessary and if you are happy you can then 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. It could be more complicated than you at first think. Good luck on finding your ideal car insurance.