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Should you ever have an accident, your car insurance is there to give you a degree of financial protection. You must factor-in car insurance as part of your motoring expenses. Having good car insurance will give you financial protection which you will need if you have an accident.

Sadly not all insurances include fixing the damages to your car, protecting against liability, legal fees or damage to any other property involved in the accident. Bolt-on niche insurance products such as inconvenience cover, gap insurance and even legal protection insurance can prove to be invaluable additions to your comprehensive car insurance to ensure an accident does not end up costing you more than you can afford should the worst happen.

Choosing the right car insurance product will protect you, your vehicle, and other parties in the long run. If you are planning to drive in the UK, you are required to purchase car insurance. The type of car insurance cover that you choose will determine the level of protection that your insurance company will give you.

WHY YOU SHOULD SHOP AROUND FOR NEW CAR INSURANCE

Shopping around for car insurance is very important for several reasons:

• You may find better quotes
• Effects of car depreciation
• A change in personal circumstances
• Your car finance may put your car at risk
• It may be possible for an insurer to cover the loss of certain personal effects
• A different insurer may include breakdown cover in your policy
• You may find inclusive legal cover offered by some insurers
• It may be possible for an insurer to also cover a second car
• You may be offered an introductory discount

Just because you have used the same insurance company or insurance broker for several years, does not mean you are getting the best deal. It doesn’t always follow that the same company or broker can offer you the best deal for your insurance.

If your broker manages your entire insurance portfolio then he is in the best position to get you the best deal, as he already has information about your demands and needs. They may be able to consolidate those demands and needs into a package which often will only be available via a broker.

Your car will depreciate in value according to both age and usage. No sooner than you have driven your new car off the showroom floor the car begins to depreciate. Every year that you own the same car, its value decreases. You should insure accordingly by getting the same coverage at a lower price. This makes perfect sense. So always ask your broker to check the value of your car against its blue book value, rather than the purchase price. This is because even fully comprehensive policies will only cover a vehicle to its blue book value rather than it’s purchase price. Your declaration concerning the value of the car should be as accurate as possible. It will usually cost more to insure a more expensive car. It’s possible that your insurance company may offer you a like-for-like replacement after an accident - but this is uncommon. There is however an insurance product called Vehicle Replacement Insurance which does just that! Click on the link to find out how it works in more detail.

At the time of your last renewal your circumstances may have been different. Perhaps you do not drive as far or often as you did, or perhaps your children have grown and want the keys to the car. Get insured accordingly. If you drive fewer miles your insurance company will recognise the decreased risk and your premium will be reduced accordinglyIf you wait until renewal time it probably won’t be that expensive to add additional drivers to your car insurance policy. Insurers may charge you an administration cost for adding additional drivers, but if you wait until it’s time to renew you may not incur this fee.

WHICH LEVEL OF COVER SHOULD I CHOOSE FOR MY CAR INSURANCE?

There are three different types of cover available in the UK.

1. In many countries including the UK, Third Party Insurance is mandatory. If you are involved in an accident, this type of cover will protect you financially against damage to the other vehicle or its occupants. Third Party Insurance acts as security against liabilities for damage to another person in a vehicle accident. Third party insurance will not cover any damage inflicted on your own car or to your person. Third party insurance will not cover any necessary repairs made to your car.
2. Third Party, Fire and Theft Insurance will cover the benefits of third party insurance and includes any financial loss to the insured vehicle caused by fire or theft. The average driver may find this the best type of cover, especially for a vehicle which doesn’t have a very high market value. A car which has been either leased or financed must have a fully comprehensive insurance policy.
3. “Fully Comp” will give you the widest insurance cover for your vehicle.It provides the basic insurance of third party, fire and theft and covers damage to the insured vehicle and any bodily injury suffered by the policyholder in an auto accident. If your car is worth more than you could afford to replace it, then you should opt for a fully comprehensive insurance policy. Finance Gap or Vehicle Replacement Gap Insurance are additional insurance products available to top up the gap between your payout and the cost of paying off a new car, so go online and find out more about these insurance products.
There are lots of factors affecting car insurance and most insurers offer secondary products which can meet any specialised needs of the policyholder.

FACTORS AFFECTING CAR INSURANCE

1. The Policyholder

• Age of the policyholder
• Gender of the policyholder
• Your marital status
• Your postcode is a factor
• The size of the car and engine
• Vehicle replacement cost
• Any modifications that have been made to the vehicle by its owner

A younger less experienced driver will pay a higher insurance premium than someone with several years driving experience.

A married personis considered more responsible for their actions than a person is with no commitments. It stands to reason that married men with kids have more responsibilities than single men and the insurance companies therefore consider married men a lower risk category.

Where a person lives also affects the insurance cost. Motorists living in rural locations and in areas with a low crime rate are more likely to get a lower insurance premium than those living in cities.

A powerful car is more likely to lose control at the hands of younger drivers: expensive cars cost a lot to replace if scrapped and should they simply require repairs the sum of the replacement parts often costs more than the used car’s value, making more powerful cars very expensive to ensure.

Modifications are more likely to alter the vehicles safety; performance is improved, and handling may be compromised making the vehicle more unpredictable. An increase in insurance premiums should be expected with car modifications, as these represent an increased risk to the insurer.

2. Driver History

• Years of driving experience
• Historical claims
• If you have points on your licence
• Annual mileage

The number of years a person has been driving suggests their understanding of the rules of the road, shows the driver has built up experience of driving under varied driving conditions and has attained a certain level of confidence while behind the wheel. Insurance companies base these assumptions on the policyholder’s claims history over the last five years. Driving convictions such as speeding, hazardous driving or driving while intoxicated will affect the premium. Most parking violations are not taken in to account.

Your annual mileage is a factor too. The more a vehicle is on the road, the higher the risk for an accident.

3. Vehicle History

• Current vehicle value
• Whether you own the car or if it is leased or financed
• Make and model of the vehicle
• Engine capacity and performance
• Modifications to the vehicle

If the vehicle has a low book value, it may not seem to be cost effective to pay for comprehensive insurance; however this is not necessarily the case. A named driver with several years of insurance cover and no claims against his or her name could find that fully comprehensive car insurance costs almost the same as a lesser level of cover, but with additional benefits such as a free courtesy car etc. When buying online you may find that additional benefits can be included at little increased cost to you. If you are leasing a vehicle or have acquired it via a finance company, then you will need to provide fully comprehensive insurance for the vehicle. You need to be able to reimburse the leasing or finance company for any damage to the car. This will be covered if you have fully comprehensive insurance.

There may be other benefits included in your car insurance policy, which are not always necessary but sometimes advisable:

• Breakdown insurance
• Courtesy vehicle
• Roadside assistance
• Some insurers may offer you legal cover included in your policy
• Cover for your windscreen
• NCD protection
• Compulsory or voluntary deductible amount

Choosing the correct insurance and getting the best quote can be daunting as there are so many variables to consider. If a website was built properly its users will find it easy to get a great price quickly and easily. A good place to start is on an insurance aggregator website. They are fairly easy to use. You’ll only need to fill out one questionnaire so that the market can be searched on your behalf. After the site has collected the quotes, you can then compare different policies, as well as being able to save your quote, amend your requirements if necessary and if you are happy you can then buy online. Before you buy online, call your broker to see if you can get a better deal based on your findings. Remember that you need to compare quotes on a like-for-like basis. This may not always be as simple as you at first think. Good luck.