If there’s one thing drivers know about insurance, it’s that it’s obligatory. But when it comes to the type of insurance they need, factors that affect the cost and what happens when a claim is made, things might start to get a little fuzzy.

Coupled with the rise in premiums over the last few years, it makes sense for drivers to be as informed as possible when it comes to getting the best protection they can. Here, we’ve compiled a collection of car insurance pointers to help you out and get the best deal.

What happens if I don’t have car insurance?

Since insurance is a legal requirement for motorists of all ages. Anyone who is found to be in violation of the rules dictated by the Continuous Insurance Enforcement (CIE) can receive a £100 fixed penalty notice, have their car clamped and even face court prosecution with fines of up to £1,000.

That means even if you have a car that you only drive occasionally, you must get it insured or declare it as off the road with a Statutory Off Road Notice (SORN) notification to avoid such infractions.

Additionally, if you have an accident while driving without insurance, you’ll have to cover all related costs yourself – including repairs to any cars or property damaged in as well as any medical bills.


What sort of car insurance do I need?

In the UK, there are three levels of car insurance: third party; third party, fire and theft; and comprehensive.

  • Third party: This kind of insurance covers you for injury or car damage caused to another person. Your own vehicle isn’t covered, so while it may be an option for those on a tight budget, you will have to fork out to pay for the repairing or replacing of your vehicle.
  • Third party, fire and theft: Covers your car in the event of fire or theft, but not for accidents; damage to another person’s car or property is covered, however. A good option if your car is not very expensive and you can manage in the event it’s written off.
  • Comprehensive: This insurance covers you for accidental damage to your car as well as a third party’s car – whether it was your fault or not. It also covers you for damage to property or injuries sustained by another person. Additionally, you can make a claim if your car is stolen or vandalised, as well as for the loss of any possessions which were kept inside the car.

What factors affect the cost of car insurance?

It’s important to shop around to get the best possible deal; simply auto-renewing with your existing insurer won’t necessarily result in the ideal insurance policy. And since insurance is affected by many different things, there’s a lot to factor in where you’re looking for the best deal, including the below:

  • Insurance company: Car insurance companies use their own formula to assess risk and decide what you pay for your coverage. This means no two insurers have the same price for the same policy, and since the difference can be hundreds of pounds, it’s essential to compare things.
  • Your car: The vehicle you drive has many different factors that affect the cost of insurance, too. Cars with a high safety rating mean the insurance company will have to pay as much if you’re in an accident, since you’ll have been relatively well protected. If the car is expensive to repair, then the company will have to fork out more for any fixes. Likewise, the older the car, the pricier the policy, since repairing an older car will need more significant amends.
  • Gender and age: Though the difference in premiums isn’t too drastic, gender and age affect insurance costs as well. Young males tend to incur higher rates since they’re statistically more likely to have accidents. On the other hand, older men generally have better rates than older women, with some evidence suggesting that the latter have more minor accidents.
  • Where you live: An insurance company will look at where you live when working out its rates too. More densely populated neighbourhoods with more cars puts you at a higher risk of accidents, theft and collisions with injuries. If there’s a higher rate of theft in the area, this will also be factored in.
  • Your driving history: If you’ve been involved in accidents, made previous claims or received any parking tickets, then your blemished record sends a pretty clear message; you’re more likely to make another claim. If your record is that bad, insurance companies may refuse to give you insurance at all.

What is the policy excess?

The excess is the amount you agree to pay towards any claim – and for the most part, the higher the excess, the lower the premium. So, a claim of £500 with an excess of £200 means the insurer only pays out £300. The excess is broken into two parts:

  • The mandatory excess: The amount set by the insurer, usually at £50 or £100.
  • The voluntary excess: The amount you choose yourself. Avoid volunteering an unrealistic high excess that you can’t afford to pay if you then made a claim.

If you’re making a small claim, it may be worthwhile paying for any repairs yourself instead, especially if you stand to lose a no-claims discount.

Are there any other types of car insurance?

Recently, there have been a number of new policies launched by insurers. These include black box (or telematics) insurance, which uses a small black box fitted to your vehicle which monitors the way you drive. Provided you’re a careful driver, it’s possible to save up to a third with a telematics policy.

If your household has more than one car, then you can also save up to a third by covering all the vehicles registered at the address on a single policy. Alternatively, if you don’t drive very often, there are short-term insurance options that will cover you to drive a vehicle for between one and 28 days.

What happens when I make a claim?

When you need to make a claim, it’s imperative that you contact your insurer as quickly as possible – when you do this, be sure have your policy details and the details of anyone else involved to hand.

Upon receiving a claim form, you should also complete and send it back as soon as possible, enclosing any supporting evidence. Also, be sure to keep a copy of the claim form, and any other relevant paperwork, along with a record of your phone calls or emails. Additionally, wait for a list of approved garages from the insurer before undertaking any repairs – if not, you could find yourself paying for the bill because the garage you used isn’t included on the list.

What other factors should I consider regarding car insurance?

Higher deductibles can lower your premium

If you agree to pay for a larger portion of your own damages by raising your deductibles, your insurance company automatically knows they won’t have to pay as much for your claims. That means they’ll usually give you a lower premium as a result. If you raise your deductibles to save money, just make sure you can afford to pay the deductible in the event of a claim.

Letting your policy lapse is worse in the long term

If you let your policy lapse, you’ll probably pay more when you buy car insurance. This is because the majority of insurance companies look at drivers without insurance as something of a risk. If you don’t want to pay for insurance, or you’re planning to let your policy expire before switching car insurance, then make sure to purchase car insurance before your current policy is cancelled – this will help you avoid paying more.

Insurance discounts can make a difference

Many insurance companies offer discounts for things such as a safe driving record, anti-theft devices, electronic payments and car safety features. When you’re shopping around for car insurance, look out for companies who reward your record of safe driving with deals and discounts.

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