Available from 1 – 90 days. So whether you need that last bit of practice before your test or you’re getting behind the wheel for the first time, you can select a policy duration that fits your needs
Glossary of Car insurance Terms
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Glossary of Car insurance Terms
ABI group – Association of British Insurers group – each make and model of car is given a risk category and put in groups 1 to 20 with the lowest risk cars being group 1 and the highest risk being group 20. Each make and model is then insured accordingly.
Any driver – Allows anybody to drive the vehicle with the policyholder’s permission – not just the person named on the insurance documents.
Approved repairer – Each insurance company will have a list of garages that they want you to have your vehicle fixed with, this is their approved repairer and repairs at an approved repairer will normally be guaranteed and the cost of the repairs will normally be settled directly with the approved repairer. Some insurers will not cover the cost of repairs if you do not use their approved repairer or you will have to settle the bill directly and then reclaim the cost from the insurance company.
Breakdown cover – Provides recovery and repair services for drivers and is sometimes included in car insurance policies.
Broker – An independent ‘go between’ who sells policies from several different car insurance companies.
DOC (Driving other cars) – Means you are covered to drive other people’s cars as long as you have their permission.
Excess – The amount you agree to pay in the event of an accident, before the insurance company pay out.
Fault claim – When you are considered to be to blame for an accident or loss, or where your insurer is unable to recover costs from somebody else because of lack of evidence.
Non-fault claim – When you are considered to be the innocent party and your insurer is able to recover the costs.
FSA (Financial Services Authority) – the UK’s financial regulator who monitor all financial services providers including car insurance providers.
Fully comprehensive – The highest level of insurance available – covering most aspects of accidents and losses.
Indemnity – Where you are placed in the same financial situation after a claim as you were before.
Insured value – The amount you said your car was worth on taking out your insurance policy. This is not necessarily what the insurance company will pay you in the event that your car is deemed to be irreparable.
Material fact – Any information that could influence your insurers’ decision to offer you cover or the terms of that cover.
No Claims Bonus – For each year you have been insured and not made a claim you gain one year no claims bonus, subject to a maximum (often 4 years no claims discount) depending on your insurer. The more you have, the cheaper your car insurance is.
Policy – The document drawn up between you and the insurer.
Premium – The amount you pay your insurer for your insurance policy.
Renewal Notice – When your car insurance is about to run out you will be sent a reminder from your car insurance provider prompting you to refresh your policy.
S, D&P (Social, domestic and pleasure) – a description of how you plan to use your vehicle; as opposed to for work purposes.
Settlement – When your insurer pays out for a claim you have made.
TPO (Third party only) – when your policy only covers the cost of damages you have done to third parties (somebody else or their vehicle, or property).
TPFT (Third party fire and theft) – the same as third party only but the policy covers for the theft of your car and if your car is damaged by fire.
Underinsurance – When your car is not insured for as much as it is worth.
Uninsured losses – Areas that are not covered by your insurance policy such as the excess you agreed to pay.
Underwriter – The person who decides whether to offer you cover based on your details and risk and who then calculates your car insurance premium.
Write off – A vehicle that is beyond repair or would cost more to repair than it would to replace.
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Why Do I Need Car Insurance?
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Car Insurance in the UK is compulsory under the 1988 Road Traffic Act and it is an offence to take a car onto a public highway without at least third party insurance in place.
Most basic car insurance policies cover third party, fire and theft covering third party liabilities as well as damage to the car caused by fire or loss due to theft. Comprehensive car insurance which is more expensive covers third party, fire and theft but also covers any damage caused by the driver to the car being driven.
According to the Motor Insurers Bureau uninsured drivers (approximately two million motorists according to the department of transport) inflict approximately £380 million of damage on UK roads which is passed on in higher insurance premiums.
Under the law a car must have a valid car insurance policy if it is taxed or not or whether it is kept on a public highway or not and whether it is driven or not.
If a car is not being used its tax disc must be redeemed and the relevent declaration (SORN) completed to confirm that the car is being kept off public roads. The scheme will provide a new fixed penalty for people who ignore official reminders that their insurance has expired. the maximum penalty for offenders is £5,000 and an automatic endorsement of your driver license with 6 to 8 penalty points.
What Are The Different Types Of Car Insurance
Type of Car Insurance |
Car Insurance Features |
Comprehensive Car Insurance |
As the name suggests provides cover both to third parties but also to you and your own car and passengers in the event of an accident. This type of cover usually allows you to drive another car (may only be on a third party basis). |
Car Legal Expenses Insurance |
Normally sold as an add on to car insurance and provides legal expense cover in the event of a dispute e.g. if you are in an accident that is not your fault you may wish to claim back uninsured losses and legal expense cover will help you fund the legal costs. |
Third Party Car Insurance |
Third party car insurance is the minimum cover required by UK law on a vehicle used ona public highway. If you have an accident this cover will protect you from having to pay for damage to other vehicles. You cannot make a claim against your own vehicle. |
Third Party Fire and Theft Car Insurance |
In addition to covering third party liabilites this cover also provides financial protection in the event of damage to your car in the event of fire or loss due to theft. |
How Do I Get The Best Car Insurance Rates?
Things to consider:
Age
If you are under 25 you will generally pay more for car insurance. For teenagers the cost of car insurance can be very high. Some insurers provide young driver car insurance schemes e.g. The Co-op and Young Marmalade provide specialist insurance for younger drivers
Voluntary Excess
To keep the cost of car insurance down many insurers provide you with the option of a voluntary excess on any claim. This is paid over and above any compulsory excess on the policy.
Gender
In the past specialist women’s car insurance providers could offer a better deal. Women generally tend to make less expensive claims than men, and so insurance companies historically reflected this in offering cheaper premiums. However, in March 2012, the European Court of Justice ruled that insurance providers cannot discriminate on gender. This ruling came into effect from December 2012.
Car Mileage
Some car insurers will adjust their car insurance premium based on the mileage you do. It is important you give an accurate indication of expected annual mileage to ensure you are not paying more than you need to. Check with your existing car insurer (if relevant) – If you already have an existing car check with your existing insurer about adding a second car onto the policy. Some car insurance companies will provide you with a discount for including a second vehicle – often called multi car insurance.
Using a Comparison website
Online comparison websites provide a useful and easy way of getting car insurance quotes. No car insurance comparison website covers the whole market so it makes sense to use more than one source to ensure you are getting the right cover at the right price. You should also note that some insurance companies do not appear on comparison websites e.g. Direct Line Car Insurance and Aviva Car Insurance
Using a Car Insurance broker
If you are not sure what cover you need or want somebody to help you through the process there are many car insurance brokers who will be happy to help. A good insurance broker will not help you in buying car insurance but also provide support in the event that you need to make a claim.If you intend to use a broker you should check their FCA (Financial Conduct Authority) registration on the FCA website.
Providing correct information
In assessing the insurance risk an insurance company will rely on the information that you give as being accurate. Information provided will determine whether insurance is provided and the cost of premiums. It is therefore important that any information you provide is correct e.g. information on any driving offences where you have been given points can have a material impact on the premium you are required to pay. Non disclosure of such information at the time of application can result in a non payout in the event of a claim. If you are using a car insurance broker this is where valuable advice can be provided.
Cheapest is not always best
With insurance you generally get what you pay for so before you sign up to an insurance policy you should be aware of what you are covered for and what is excluded. You should consider what you need and ensure you are adequately covered. This may mean you have to pay more to get what you want.
Automatic Renewal
When you buy car insurance and you pay by direct debit some insurance companies will automatically renew your car insurance policy at the renewal date. You should receive a written notice of the car insurance renewal and any increase in the premium. If you are not happy you need to be proactive and shop around before the renewal date and cancel the existing policy before renewal.
Changing your mind
You have the right to change your mind within a set period normally 14 days from purchase of the car insurance policy and have your money returned.
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