No
matter what car, van or bike you drive, we're all looking for great
value and quality in our UK motor insurance? But who is the best -
who is the cheapest and who offers the great service in the event of a
claim?
See
the insurance companies below who claim to offer competitive cover at
sensible prices, our
guide to the jargon and tips for cutting your quote - Good
Luck:-
Shopping
for car insurance (often referred to as ‘motor insurance’) has
traditionally been a painstaking but necessary task. From fully comp to
third party, finding the right deal from numerous UK car insurance
companies can prove to be an overwhelming challenge using a telephone.
However, there’s more to a search than just finding cheap car
insurance. You need to ensure you get the cover to suit your needs as a
motorist. Here are some factors you should consider:
THE
RIGHT POLICY
What
type of car insurance is right for you? It is illegal to drive in the UK
without insurance and therefore the minimum standard of cover you can
take out is ‘third party’. This covers:
· Liability for injuries to others, including passengers.
· Liability for damage to someone’s property.
· Liability of passengers for accidents caused by them.
· Liability arising from the use of a caravan or trailer while attached
to the car.
Next comes ‘third party fire and theft’ which will also pay out if
your vehicle is stolen or set on fire.
A
comprehensive (normally known as ‘fully comprehensive’) car
insurance policy will pay-out for all of the areas covered by third
party fire and theft with the addition of paying for any damage to your
own vehicle regardless of who caused the accident. It also covers loss
of, or damage to, personal effects in the car.
Business
car insurance (also known as ‘commercial car insurance’) meets the
needs of small businesses with company vehicles.
Though
polices vary between individual car insurance companies, benefits
typically include a courtesy car, free cover for driving in Europe and,
in some cases, legal aid when the accident is not your fault. These
benefits may incur an extra cost.
We
all know car insurance is an expensive business – but where does our
money go? One factor rarely considered when making a claim is how your
car insurance premium is used – yet this information may help you
choose your cover wisely and make a more informed choice on the cover
you opt for.
WHERE
THE MONEY GOES
The
money you pay on your car insurance is not merely set aside in case you
need it – instead it is put into one big pot. Here’s a breakdown of
where the money from your premium goes:
· 50% for claims.
· 25% for legal and administrative costs.
· 25% for costs of running the company.
These numbers vary between insurers. Some are better than others at
saving and on cutting their overheads.
Most of the money paid out on car insurance claims is paid on property
damage. Collision damage makes up about 50% of an insurance company’s
total expenditure. However, this is a relatively small amount when taken
in context with medical expenses and personal injury claims because the
most an insurance company will ever pay out is the ‘fair market
value’ for your vehicle. That is why collision and comprehensive cover
costs companies a lot of money.
Insurance
companies also spend a lot of money processing and settling claims.
There is little that can be done to avoid these expenses but in part six
we examine excess charges and their benefits in cutting these costs.
Additionally,
advertising, staff and commission payments further increase the costs of
running an insurance company – the best way to avoid these costs is to
buy online.
Now
you know about where your money goes, move on to part three for details
on legal requirements and making a claim.
LEGAL
REQUIREMENTS
The
law requires that any vehicles of three years old and over have a valid
MOT certificate. You are unable to tax a vehicle without an MOT and
certificate of insurance and driving a car without these is an offence.
The
Road Traffic Act states that all motorists must be insured against their
liability for injuring other people (including passengers) and for
damage to other people’s property. It is also vital to keep your
insurance company up-to-date including vehicle modifications and fixed
penalties as it is an offence not to – and it may affect any claim you
make.
Most
insurers will issue the following documents:
Certificate of insurance – You will need this to buy your road
tax.
A cover note - It acts as a temporary policy and certificate
until your new insurance policy has been set up.
Policy document – This tells you everything you are covered
for.
MAKING
A CLAIM
Most
car insurance companies will have a claims help-line with certain office
hours. Some will offer an accident emergency recovery hotline for
outside those hours if you have the addition of roadside recovery as
part of your claim.
It
is worth discovering beforehand if your insurer will immediately
authorise repairs from recommended agents and in the event of a theft
does your insurance include cover for personal belongings or replacement
locks? It’s also worth checking whether a courtesy car is included in
the price quoted, and if so, for how long –your own car may be off the
road for a number of weeks after an accident and hire cars can be
expensive.
JARGON BUSTER
Car
insurance can be a minefield of difficult terminology and confusing
jargon. Moneysupermarket.com wants to help you find the right car
insurance deal for you and so we’ve compiled a guide to help bust
through the jargon.
ABI Group– Your car will be
given a specific ranking based on the level of risk involved with each
car type and model.
Approved Repairer– Repairers
recommended by your insurers.
DOC Cover– Otherwise known as
Driving Other Cars.
Fault/Non-Fault Claim– A
non-fault claim is when the insurer can recover the costs from someone
else. A fault claim is if they cannot recover the costs regardless of
whether the accident was your fault.
Indemnity- Insurance
policyholders are put in the same financial position after a loss as
they were immediately before it.
IPT– A Government tax charged
as a percentage of premiums.
Loss adjuster – Investigates the
legitimacy of claims.
Material fact – Failure to
disclose material could invalidate a policy, such as driving
convictions.
S D & P- Social Domestic
& Pleasure. A description of how you plan to use your car.
Settlement – When an insurer
pays a claim.
TPO– Third Party Only.
Under-insurance– For example
insuring your car for £8,000 when the car is worth £10,000. Insurance
companies will almost always scale down claims as a result.
ULR cover – Uninsured loss
recovery – better known as legal expenses cover, which you can add on
to your policy.
Uninsured losses – Elements not
covered by your policy such as hire charges.
Underwriter – Person who decides
whether to accept a risk and calculates the premium.
WHY
DOES INSURANCE COST SO MUCH
When
deciding which type of benefits are right for you it can often help to
understand the perspective of the car insurance company. These include:
Age/sex– Younger drivers and
learner drivers are less experienced and therefore considered more
likely to be involved in an accident. Some companies now also offer
lower premiums for women, who statistics have proven are involved in
fewer accidents than men.
Insurance Group– Most cars are
given an insurance group ranking based on the level of risk involved
with each car type and group (often based on likely repair costs).
Generally, high-powered performance cars will be in the highest group
(up to ‘20’), whereas a small car will be generally lower ranked and
therefore should receive cheaper car insurance.
Cost of vehicle– If you drive a
classic or performance car you can expect to pay a higher premium as
these cars generally cost more to repair than others.
Engine size– The more powerful
the car the more likely it is to be involved in a high-speed accident.
Your occupation– If you are
driving as part of your job you are more likely to be involved in an
accident than someone who, for example, only drives at weekends.
Where you live– Higher density
of traffic and higher crime rates can make your car more susceptible to
an accident or theft respectively.
Your history– The more
accidents you have, the more expensive your cover is likely to be.
BENEFITS
and EXTRAS
The
benefits available vary between car insurance companies. Of course the
more benefits you add, the more expensive your premium. The most common
example is the addition of a free courtesy car in the event that your
vehicle is off the road due to an accident. Legal protection too can be
considered, and some companies will offer legal help following a ‘not
at fault’ incident. Roadside breakdown service is also on offer from
some car insurance companies but not all – it often proves cheaper to
shop around. Also, it is worth deciding whether it’s worth paying
extra for overseas driving cover.
There
are also ways to reduce your premium and get a more competitive quote:
No claims bonus– Each year you
insure your car and do not make a claim you build up a ‘no claims
bonus’ (sometimes known as ‘no claims discount’). In some cases a
five-year no claims bonus can save you 65% on your premiums.
Protected no claims bonus– This
allows you to pay a premium so that in the event of an accident you
don’t lose your no claims bonus. Although it costs extra to protect
your no claims bonus, you’ll save pounds in the event of any claims
you do have to make.
Excess charge– Many companies
issue policies that have a ‘compulsory excess’ (and sometimes a
‘voluntary excess’). This refers to the amount of money you are
willing to pay in the event of an accident. So if your excess was £100
and the total cost of repairs was £300 then you would pay £100 and the
insurance company would also pay £200. However, if the cost of repairs
was £100 or lower you would pay the total cost. The more money you’re
willing to pay in excess, the lower your premium.
OTHER
FACTORS TO CUT YOUR COSTS
In
addition to no claims bonus and excess charges seen above there are many
other factors to help lower the cost of your car insurance premium:
Parking location– for maximum
benefit keep your car parked in a locked garage overnight. If you
don’t have access to a garage, then parking on a driveway is viewed as
less of a risk than parking on the street.
Mileage– Update your estimated
annual mileage each year. If you change jobs and have a shorter commute
you could save cash.
Learner drivers– Extra lessons
with the Pass Plus scheme can cut premiums by as much as 35%. Motorists
who pass an ‘advanced driver’ course can also see their premiums
reduced.
Marriage– Married men attract
lower premiums than single men.
Car security– A car alarm,
immobiliser or tracker makes it less likely that your car will be stolen
and therefore should reduce your premium.
Don’t speed– The higher the
number of speeding offences, the more expensive your car insurance is
likely to be.
Satellite Navigation– Some
insurers could cut costs for drivers with the satellite navigation
facility.
Parents– Adding teenagers to
your policy can significantly increase the cost of your policy. If it is
unavoidable then try and keep them on your insurance for the minimum
amount of time – for example during the holidays.
Young drivers– The reverse is
true for younger drivers because adding a parent to your insurance, or
an older, more experienced driver, can cut costs.
Optional extras– Only select to
have a courtesy car or cover for legal expenses if you really need them.
Modifications– New wheels,
seats, colour changes and adding a spoiler are all changes that could
add to your premium.
Avoid monthly premiums- Most
insurers charge a fee for this service. The fee ranges from and Annual
Percentage fee of 13% up to 29% APR. You can avoid this by taking out a credit
card with an introductory interest free offer.
SHOP
AROUND
The
internet has made shopping around easier without the need to wait on
call centres. In addition, some insurers will offer as much as a 20%
discount to people who buy their car insurance online.
Broadly there are four options available when researching and buying car
insurance. These are:
Insurance Brokers– Aim to
deliver the customer choice by utilising their computer systems.
However, a broker can only ever present the insurers he has deals with.
Direct Insurers– They cut out
the middleman because commissions paid to brokers can be saved if the
insurer gives the benefits to you. These include: Direct Line, e-Sure,
Admiral, Hastings, 1st Alternative, Churchill, Privilege, Norwich Union
Direct and Cornhill Direct, Moreth>n, Elephant and Budget.
Branded Providers– Established
names who have added insurance to their extensive list of products.
These include: Virgin Money, Tesco, Sainsbury’s, MBNA, Marks and
Spencer, the Post Office, the major car dealerships and Kwik Fit.
Full Search Provider– With a
full search provider you are able to enter your data and then a full
search of the market is performed to return a list of potential car
insurance providers that will include insurers, direct insurers, brokers
and UK brands.
If you’re concerned the cheapest quotes are from insurers you’re
unfamiliar with, why not find out more about the company’s financial
reliability? This can be done through the Standards and Poors website.
Their ratings work as follows:
AAA Extremely strong
AA Very strong
A Strong
BBB Good
BB Marginal
B Weak
We hope the above information coupled to our comprehensive A to Z
directory of vehicle insurers, will make the task of finding the best
policy for you an easier job.
Now you’ve got enough to get you started, so good luck finding your
perfect policy from the Solarnavigator team.
