Car insurance is compulsory in the UK as you cannot drive a car on a public highway without it. So what do you need to know about it before you buy?

The most important thing is to read your policy carefully and ensure that you are receiving reliable car insurance cover from a recognised insurer. Beyond that, knowing the levels of insurance out there that are available is crucial to get the right cover for your car.

Three Levels of Cover

Third party cover is the minimum level of car insurance is and therefore usually the cheapest. This kind of insurance will cover damage to the other driver’s car in an accident you caused and will insure against accidental injury or death to other people by your vehicle. It will not cover your own vehicle for any repairs which are needed, whether by accident or break in, which will have to come out of your pocket. People who have very low value cars will probably find this to be an acceptable level of cover, but if your car is of value then you will want to look at a higher level of insurance.

Third party fire and theft insurance is the next level up on the insurance ladder. This insures the other driver’s car and life again, but also insures your car for damage by theft (ie. thieves break the window to steal your stereo) or fire and explosion. What this insurance does not cover is damage to your car in the event of an accident.

The highest level of insurance is fully comprehensive cover. This insures you for all of the third party fire and theft insurance and additionally covers your vehicle for accidental damage, malicious damage and windscreen damage. This kind of policy could include extra benefits such as personal accident cover, which would cover you, the driver, for some bodily injuries, or sometimes it includes a 90 day EU cover which is known as a green card, but these are not always included in fully comprehensive insurance and you will need to check it in your policy details.

Additional Things to Consider

The excess is the amount you will pay if you are responsible for damage in an insurance claim. If the damage is worth £500 and your excess is £200 then your insurer will pay out £300. Usually the amount of excess you pay is agreed at the time of taking out the policy and has a direct reflection on the amount you will pay each month for the insurance. So the more excess you pay in the event of an accident the less you will have to pay for your insurance each month.

A ‘no claims bonus’ is important as it affects the price you will pay for car insurance. The longer you have insurance without making a claim the higher your ‘no claims bonus’ will be. It can potentially reduce your car insurance quote by 60-75% if you remain accident-free for five years or more. Sometimes if you make a claim it only reduces the number of years ‘no claims bonus’ you have rather than starting you from zero again. The ‘no claims bonus’ is more important to some insurers than others and will affect their quoted price accordingly.

Be sure you fully understand your policy and what it covers, or you may be spending too much or too little per month, or worse you may be left out in the cold if something happens on the road and you are not covered for it.


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