Choosing your car insurance is an important decision. The cover you buy protects you, your vehicle, other road users and their property, and even the property owned by neighbours of the roads or other public spaces where you are using your car.
Even if you were to compare logbook loans online, you are required to have and also maintain insurance on your vehicle throughout the loan.
The problem is that there are so many different choices to make, you may find the selection almost overwhelming. So, here are a few suggestions about choosing the most suitable car insurance for you.
Comparisons
You are likely to make comparisons before buying any goods or services – and car insurance is no different.
You decide what it is you need and compare the products available in a competitive market place. By comparing like with like, you aim to identify the product that appears to offer everything you need at a price that represents good value for money.
Car insurance is an especially competitive market and the sheer number of variables in making any selection, may make your choice especially difficult.
For that reason, the British Insurance Brokers’ Association (BIBA) suggests that you consult a broker, who has wider experience and expertise in the market and may shop around on your behalf, saving you the time-consuming task of trying to compare so many different products and still overlooking some vital element of cover you may have needed.
The following might help to explain how quite so many variables may be involved in choosing the most suitable car insurance for you.
To suit your needs
The first point to stress is that the car insurance you choose is the one that suits you. Not every driver’s needs are the same, not all cars are equal, and not all pockets the same depth.
In other words, no one size fits all when it comes to car insurance. The cover that meets your particular needs and circumstances is very much an individual decision.
The law
If you own or want to drive a car, you have no option but to buy motor insurance.
A minimum of third party insurance is a legal obligation whether you intend to drive the vehicle on the road or in any other public space, or even if you are not using it (the legal requirement is still there under so-called “continuous insurance enforcement”). The only exception to the need for insurance is if you have obtained a Statutory Off Road Notification (SORN) from the Driver and Vehicle Licensing Agency (DVLA).
Third party cover is required so that you are certain of being able to meet claims for damages from anyone injured whilst you are driving your car or has their own property damaged.
The penalties are already stiff if you do not have a SORN and are the keeper of an uninsured vehicle – but they are even steeper if you are caught driving without insurance.
Levels of insurance
Third party insurance may be a legal requirement, but it offers no protection if your car is stolen, catches fire or is damaged as the result of your actions (if the damage is another driver’s fault, you are protected by the third party insurance they are required to hold).
To protect your vehicle against theft or accidental damage, therefore, you need either:
- third party, fire and theft insurance – which provides the statutory third party cover, but also indemnifies you against loss of the vehicle through fire or theft; or
- comprehensive insurance – which also adds protection against many forms of accidental damage in addition to cover against third party, fire and theft risks.
A description of these different levels of motor insurance is included in a guide published by the Consumers’ Association’s Which? magazine.
How much does it cost?
How much you pay for your car insurance depends on a whole host of factors, which together constitute the risk which any insurer considers it is covering. Those risks are assessed by factors such as:
- the type, make, model and age of the car you want to insure – its value and make give some indication of the likely costs of repairs or its desirability to thieves;
- where you live, what work you do and where you park your car (on the street or on your driveway or garage, for example) – since these are all questions with a bearing on the security of the vehicle and statistical evidence of claims made by certain occupations and certain postcodes;
- your age – younger drivers are considered an especially high risk by many insurers, who set the price of insurance premiums accordingly;
- your claims history and record of any driving convictions – past offences and claims are considered by insurers to be a sign of your being more likely to commit similar mistakes in the future.
Other factors affecting the cost of your premiums
Some of the additional factors affecting the price you pay in insurance premiums include:
- the amount of excess you agree to pay (the first part of any successful motor insurance claim for which you remain financially responsible) – the higher the excess, the lower the premium;
- the amount of no claims bonus you may have earned – the discount for being claims-free in preceding years; and
- by restricting the people insured to drive your car to just yourself or other named drivers, you are also likely to pay lower premiums.
Reviewing your car insurance
As is probably clear, there is a wide range of variables involved in choosing the car insurance that meets your needs and requirements – which are also likely to change from one year to the next.
Because of those changes, and the variations in prices that are involved, it is a good idea never to automatically renew your car insurance from one year to the next, but to consider carefully just how your needs may have changed, whether new products have come onto the market, and whether you may find better value for money elsewhere.
