What Are Your Options When Considering Car Insurance?
Friday, 28 October 2011
If you have a car or other motorised vehicle, then to drive it legally in the UK you require some form of car insurance. If you drive your car on a public highway without insurance, it is an offence under the terms of the Road Traffic Act.
Many people assume car insurance is a single, generic product but actually, there are many different forms of insurance. Each type of insurance available offers a different standard of cover for the driver and the vehicle; ranging from basic cover for other people, to more comprehensive levels of cover that include the policyholder, their vehicle and their possessions.
In this article, we are going to compare car insurance policies by looking at the three types available legally in the UK. The options are:
1. Third party insurance
This is the minimum level of insurance that is acceptable legally. There is some confusion over what the term 'third party' actually refers to in this form of insurance. This term means that only the people affected by the accident other than the driver (such as other road users, pedestrians or passengers in the car) are covered for their losses, but not the driver. The term 'third party' includes:
- Any injuries incurred by other people, such as other road users, pedestrians or passengers inside your vehicle at the time of the accident.
• Damage incurred to the property or possessions of another person, such as another person's house or vehicle. This form of insurance does not include cover for damage to your own vehicle or property.
2. Third party, fire and theft insurance
This form of insurance offers the same level of cover as third party insurance, but also includes cover against your car being stolen, damaged by fire, or both.
3. Comprehensive insurance
Comprehensive insurance not only offers the same cover as outlined in a third party, fire and theft policy, but also includes many other forms of additional cover. Some of the most popular policies may include:
• Replacement or repair of windscreens, sunroof and windows (in many cases free of charge).
• Any damage to your vehicle incurred by an accident (regardless of who was at fault).
• Any malicious damage to your vehicle caused by a third party.
• The cost of replacing personal property lost, stolen or damaged in an accident or incident.
• Personal accident expenses payable as a result of an incident.
• Medical expenses incurred due to an accident, though many policies may specify a limit on how much the insurance company will pay in the event of a claim.
In addition, comprehensive policies are increasingly offering drivers new-for-old replacement of their vehicle should it be written off within its first year of operation, as well as free use of a hire car should their vehicle need to be repaired for a period of time after an accident.
As a general rule of thumb, the greater the cover received the more expensive the insurance policy is likely to be, though it is possible to reduce costs by comparing like-for-like cover using a trusted comparison website and by building up several years no-claims-bonus.
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