Car Insurance

It is compulsory to have car insurance whilst driving on UK roads. Those who drive without insurance are committing a crime and could face having points put on their driving licence, losing their licence or even having their car crushed.

Car insurance was first made compulsory in 1930 under the Road Traffic Act. The then UK Government introduced this Act which meant that everyone who had a vehicle on the road must have had at least third party personal injury insurance. As cars became more popular the auto insurance business began to thrive and has done ever since.

The minimum legal requirement for car insurance is Third Party Cover. This type of cover ensures that other parties involved in an incident are covered. It means that if you have an accident that you are deemed liable for, the driver of the other car is covered. You however, would not be able to claim for damage to your car. People often opt for this type of cover as it typically costs less. Another reason for opting for this type of cover is because your vehicle is very low in value.

Third Party Cover does not cover a car if it happens to be stolen or burnt out. To ensure you are covered for this you can opt for Third Party, Fire and Theft cover. This will protect you against the above said circumstances.

If a driver wishes to make sure that they and their car are covered for most eventualities then the safest bet is to take out Comprehensive Car Insurance. Comprehensive Car Insurance covers you for damage to other cars, damage to other property, damage to other people and also damage to your own car. You are mostly covered for all of the above regardless of whether the accident is your fault or not.

Some policies have added benefits if you choose to take out Comprehensive Car Insurance. For example, you may have stereo cover up to a certain value or your handbag and its contents may be covered. Some companies also provide a courtesy car to use if your car being repaired due to damages caused by an accident or incident.

Comprehensive Car Insurance and what it covers you and others for varies from company-to-company. It is always recommended that you know what you are and are not protected for by reading the terms and conditions of your individual policy.

The cost of Comprehensive Car Insurance tends to be higher than Third Party Cover or Third Party, Fire and Theft Cover. However, people see the price of their car insurance drop as they get older and are classed as being a more ‘experienced’ and safe driver.

Typically young drivers pay considerably more for their car insurance as they are classed as higher risk drivers. As drivers accrue more experience whilst simultaneously not claiming for incidents on their insurance they will see the cost of their motor insurance drop. This is commonly known as a no claims bonus discount. It can see drivers can save hundreds of pounds on their car insurance.

A no claims bonus will be lost (or partially lost) if a driver is involved in an incident that was their fault, or if no one admits fault or if there was no one else involved in an incident. The money that can be saved from having not claimed on car insurance for a number of years is so big that some insurers allow you to ‘protect’ your years of no claims at an extra cost.

Other ways to keep the cost of your car insurance down includes making sure you do not accrue penalty points on your licence. If you are caught speeding for example, it is likely that you will have points put on your licence. This is likely to see the cost of your car insurance increase as you are deemed to be a higher risk driver than someone who has not been caught speeding. Points will also be assigned to your licence for other motoring offences including drinking and driving.

Points can remain on your licence for up to eleven years and if you build up more than twelve points in a three year period you may well have your licence revoked. In short, it means that being a considerate, safe and sensible driver will help with keeping the cost of your car insurance down whilst you build up a good no claims bonus.