Percy's Top Tip:

When it comes to insuring your car, there are three main types of cover you can choose from.

 

The first, Third Party, is the most basic and limits what's actually insured to covering the driver against any damage and injury that is caused to another person and their property. Nothing else is covered.

 

Next grade up is Third Party, Fire and Theft and what's covered is all in the title - so same as Third Party and cover that will pay to repair (or replace) your vehicle if it's damaged by fire or theft.

 

Top tier of cover is Comprehensive and on top of covering you for the first two types you will also be insured against any damage to your own vehicle in the event of an accident.

 

Comprehensive cover also extends to insuring personal effects, windscreen, medical expenses and accidental damage. Such additional features are not universally included in all polices - so double check each list as you compare.

 

Budget-conscious drivers should also look out for cheaper options on Comprehensive policies offering a limited benefits list known as 'stripped down' cover.

 

Sometimes this means a benefit isn't included or the list of inclusions, say for personal effects, has been cut back.

 

Policy exclusions

In as much as it's important to keep a track of what's included in a car insurance policy, you need to be aware of exclusions - what your not covered for no matter what the outcome or how blameless you are as a driver.

 

All exclusions will be listed in the policy documents. Typical exclusions include no cover if you are involved in an accident while driving a different car to that named on your policy and car racing is universally excluded by all run-of-the-mill insurance offers.

 

Younger drivers under the age of 25 are not covered by all policies and can be expensive.

 

Keeping costs down

A secure car lowers premiums - make sure you tell your insurer about alarms and safe lock-ups. The criteria that is used to measure you and your car's risk includes the chances of your having an accident; the risk of the vehicle being stolen or broken into; and what the repair/replacement costs will be in the event of an accident.

 

All three areas of risk are assessed on the driver's age and occupation, your age, and where you keep your car overnight.

 

Another key factor affecting premiums is type of car.

 

These are rated on a scale of 1 - 50 on a database compiled by the Association of British Insurers. Such a scale is necessary so that insurers can accurately gauge the likely costs of repairs on more complex and sophisticated vehicles.

 

A car with a smaller engine, such as a 1.1 litre rather than a 1.6 litre, will be appreciably lower to insure. (There's less road tax to stump out for as well!)

 

Cars which are not modified in any way, such as making the vehicle more stylish, faster, louder) will not cost as much to insure either.

 

The less you drive the lower your premium. An insurance quote will also be worked out on the amount of mileage you drive each year. If you don't travel far and wide, it's worth pointing that out to your insurance company to get a further reduction.

 

The larger the excess you agree to, the lower your premiums. An excess is the charge you must meet first towards any claim before the insurance company pays out.

 

Compare excesses offered across a handful of policies and work out what's an acceptable amount that you could afford to stump up for repairs, replacement and/or recovery should the need arise.

 

The two kinds of excesses are compulsory and voluntary.

 

Compulsory, as the label implies, is set by the insurance company and will be calculated according to the information you supply when seeking a quote. The younger the driver, the more costly the car, the higher the compulsory excess.

 

Voluntary excesses are what you opt to pay for yourself in order to lower your overall premium.

 

Watch out for

The annual cost of a comprehensive policy may end up costing you more than a car is actually worth if it's an old banger. But if you bought such a vehicle with a loan and it does get written off, remember your loan commitments won't be unless you are insured appropriately.

 

Legal protection is another charge or benefit, depending on how you view such extras. What you are paying for is to be covered for any legal costs incurred if you have an accident caused by someone else. The protection includes solicitors' costs in seeking your compensation for any injuries, replacement car and/or public transport costs. This benefit works out at a couple of pounds more per month and certainly buys those covered peace of mind.

 

No claims discount/bonus

Most no claims discounts (NCDs) will knock off around 30% of the premium after a year's claim-free driving.

 

Discounts can rise as high as 70% after five years. NCDs can be protected over a period of time for top-up charge on your premium - so look out for policies that offer the chance to keep the discount provided you only make two claims over a three year period and be prepared to pay around £50 more.

 

Such an arrangement means you'll have to stay with the insurance provider for the duration of the offer and there's no guarantee premiums won't be increased were a claim to be made. No two policies will offer the same no-claims discount (NCD) so, again, comparisons are necessary. Such discounts are worth protecting, so don't jeopardise yours by making a claim for some minor damage.

 

For every claim you make, you can lose as much as two years' no claims discount.

 

Claims service

Having an accident is stressful, so many consumers now minimise the stress by opting for a claims service. Such a service offers a range of essential services in the event of a road traffic accident. A claims service can include:

• 24/7 assistance when reporting all incidents with friendly agents
• When the incident wasn't your fault, you'll have access to:
• A Replacement vehicle delivered within 24 hours
• Repairs to your vehicle completed within a Insurer Approved network
• Jargon free Solicitors with 100% compensation awarded to you.

Check out Payingtoomuch.com's Claims Service

 

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