Car insurance protects you and your family financially if you ever have a motor accident, be it your fault or not. It is a mandatory and necessary expense if you own or drive a motor vehicle. You need a good car insurance policy for the financial protection it will afford you in the event of an automobile 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 plan to drive, you must be able to prove that you have purchased car insurance. Your insurance company will cover you at a level determined by the type of policy you choose.

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
• Depreciation will affect the value of your car
• A change in personal circumstances
• Car financing could put you and the car in a higher risk category
• Personal effects loss may be covered by some insurers
• You may find inclusive breakdown cover
• You could find a policy which includes legal cover
• 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. All it really means is that you have used the same insurance company or insurance broker for the past several years.

An insurance broker already familiar with your demands and needs from your insurance history will probably be in a position to get you the best deal. This is also the case with car insurance as they can often consolidate your insurance needs into an all inclusive package which most insurance companies only make available to brokers.

Car depreciation is a direct result of a vehicle’s age and usage. Car depreciation starts as soon as you drive it away from the car dealership. For every year that you own a car it will decrease in value. You should get a reduction in your premium to reflect this. This makes perfect sense. For this reason you should make sure that you have your assumed car’s value checked against its current blue book value as opposed to against 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. You may be lucky enough to find a policy which offers to replace your car with the same of similar following an accident, but this is not usually the case. 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. Allow your insurance policy to reflect these changes by renewing accordingly. Insurance companies lower their prices for low mileage drivers and discounts can be significantYou can add additional drivers to your policy for relatively little expense, especially if you wait until it’s time to renew. 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 CAR INSURANCE IS THE BEST CHOICE?

There are three types of vehicle insurance in the UK.

1. Basic Third Party Insurance is mandatory in many countries, including the UK. This type of cover insures a vehicle and driver against damage to another person’s car, driver or passengers if involved in an accident. Third Party Insurance acts as security against liabilities for damage to another person in a vehicle accident. The insured is not protected against bodily injury or damage to their own vehicle with this type of policy. You will not be reimbursed for repair costs with a third party only insurance policy.
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. For a vehicle that does not have a high market value, this is often the best cover for the average driver. 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.
3. The widest coverage is provided by a Fully Comprehensive insurance policy - or “fully comp”.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 the vehicle value is higher than the insured can afford to pay to replace it, then fully comprehensive is the preferred choice. 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
• Marital status
• Your postcode is a factor
• How large the car and engine are
• 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 a married man with children has more responsibilities and the insurance companies will therefore consider this person a lower risk than a single male in his early twenties driving a WRX.

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. The insurance company therefore sees these factors as an increased risk and will increase their premiums as a result.

2. Driver History

• Years of driving experience
• Previous 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. Most driving convictions negatively affect motor insurance premiums for drivers. Parking violations are not included.

Your annual mileage is a factor too. The risk of having an accident increases the longer a vehicle is on the road.

3. Vehicle History

• Current vehicle value
• Whether you own the car or if it is leased or financed
• Car make and model
• Engine size 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. Leased or financed vehicles require comprehensive insurance. This is so that they can be reimbursed for any damage caused to the car by the policyholder. 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
• Breakdown assistance
• Some insurers may offer you legal cover included in your policy
• Cover for your windscreen
• No Claims 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. An easy to follow quote engine will get the right quote quickly and easily. Consider using an insurance aggregator website for your initial quotes. Aggregator websites are easy to use. As the buyer you only need to answer the questions once and they will search the insurance market for you. 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 commit to a purchase it’s a good idea to first tell your broker the results of your search to see if he can get you a better deal. When comparing quotes online, remember to do so on a like-for-like basis. This is more difficult than you may initially think. Good luck on finding the best policy for your needs.