iQep: Insurance & Finance

After an accident, it is always a good idea to get the police involved, even if an exchange of insurance details with the other party has occurred.  Some insurance companies will ask for a police report to back up the policyholder’s version of events.  This will help to determine who is at fault when it comes to paying out for damages incurred to vehicles or property. 

Ensuring each party exchanges insurance details and car registration information is the first step.  If it is possible to take photographs of the cars’ positions, damage to the vehicles and property, that may also be useful for future reference.  Calling the insurance company while the details of what happened are still clear in the mind is also a good idea. 

The insurance company will ask for all the information they need in that first call.  They will take the other party’s details from you so that they can liaise with their insurance company regarding the accident.  They will clarify exactly what has happened and make arrangements for the car to be inspected at an approved garage. 

Depending on the garage report, they will decide if the car can be repaired or not.  If the car is not to be repaired, this is what is known as a “write off”.  The insurance company will then pay out to the policyholder the value of the car, pre accident state.  If the car can be repaired then they will arrange to have the car taken away and will cover the cost of repair.

Insurance is based on the assessment of risk and thus, each individual driver is assessed individually. Risk assessment is entirely at the discretion of the insurance company and is evaluated partly on the answers to questions given when applying for insurance, and partly on statistical factors, the types of people involved and the area in which they live.

Age is a key factor in risk assessment for car insurance. Young drivers are generally classed as high risk and consequently, premiums can be extremely high, making it difficult for them to afford insurance cover.

On the other hand, mature drivers aged over 50 may find, especially if they have an unblemished driving record, that premiums are very attractive as they are considered to be less of a risk. However, once motorists reach 70 years of age, insurers may become more wary, as they may factor in reaction time.

Motorists in possession of a poor claims record, significant penalty points on their driving licence, or who have been previously disqualified from driving, are likely to pay a higher premium on their insurance.

When a motorist applies for car insurance, it is important that they are honest when answering the detailed questions that they are asked. Car insurers are linked to a central database to ensure that anyone applying is not doing so fraudulently. Fraud costs insurance companies considerably each year, and thus often results in increased insurance premiums for everyone. This means that honesty is always the best policy.

Drivers will be asked about the type of car to be insured, the estimated mileage the car is likely to accumulate over a year, whether or not the car is to be used for social and leisure purposes only or for business use too, the estimated value of the car, and the driver’s profession. The greater the estimated mileage the car is likely to accumulate, the higher the premium is likely to be, as the risk of an accident will be considered to be higher than for someone who accumulates a lesser mileage.

If a car is kept in a locked garage or on a driveway, the premium may well be lower, and this is the sort of information that an insurer needs to know to balance up the risk of there being a claim.

Third Party Only

Third party insurance is the basic requirement to satisfy the law.  It means that if the driver is responsible for an accident there is a level of cover available that ensures people who are injured in the accident are compensated.  This level of insurance also covers compensation to any passengers in the driver’s vehicle, but it does not cover any of the costs incurred by the driver as a result of the accident.

As third party only insurance is the basic legal requirement, most insurance companies will offer more levels of cover over and above that requirement.  Exactly what is covered by different policies will vary, and depend on what an insurance company offers.  Motorists should check carefully that the policy they take out is appropriate for their needs.

Third Party Fire and Theft

This policy gives the same protection as third party only, but also provides insurance should a motorist’s vehicle be stolen or suffer fire damage.  Older vehicles with less sophisticated electronic security systems tend to be at a higher risk of theft.

Comprehensive

In addition to providing cover for third party fire and theft, this insurance also gives cover for costs relating to accidental damage to the driver’s vehicle.  In addition to this, there are a number of other optional additions to a comprehensive policy that insurance companies may offer.

These include provision of a courtesy car while the motorist’s vehicle is under repair, insurance for legal costs and schemes for roadside recovery.

Running a car can be an expensive business, with the price of fuel rising steadily higher and endless charges for parking, vehicle tax and repairs.  This means that getting a good deal on car insurance is vital for a lot of people, and luckily there are some simple steps that anyone can take to increase their chances of a bargain.

One good way of improving your position is to study for a Pass Plus test or enrol on an advanced driving course.  Many insurance companies will offer significant discounts to applicants with these credentials, as they can prove that they have good driving skills and are therefore less likely to be involved in an accident.

Another easy measure that can be taken is to improve the security features of your vehicle.  Anything that will deter thieves or vandals is likely to make your car less of a risk for insurers, so they may well give you a more generous quote.  Some ideas include adding a car alarm or a steering wheel lock, but always check that you install a system that is approved by your insurance company.

Lastly, a very simple way of saving money is to shop around each time your policy runs out, rather than automatically renewing with the same company.  New deals are always being offered, and you may very well find that you would be better off purchasing your cover from a different insurer. 

Third party car insurance is a legal requirement and will enable you to provide compensation to third parties, including any passengers that are injured in your car. With this insurance, you will be covered for the cost of any damage to another driver’s vehicle, any medical costs that occur as a result of injuries to other drivers or passengers and the cost of any legal fees.

Third party car insurance does not cover damage to your own vehicle, so you may wish to consider seeking out a policy that offers cover for your own vehicle as well as damage to a third party’s vehicle. There can also be other restrictions with third party insurance. For example, cover may not be provided for those who cause accidents who do not have a valid license. Checking your car insurance carefully will enable you to become aware of what you will and will not be covered for.

There are comparison websites that offer services for those wishing to take out third party car insurance only. By comparing policies, you can increase your chances of finding third party car insurance that suits your requirements at an affordable price. You can also obtain quotes to see which companies offer the best third party car insurance deals.
 
Third party insurance is the best choice for those wishing to avoid the risk of having to pay high costs caused by damage or injury to others whilst on the road. However, this will need to be combined with another car insurance policy to ensure that you are fully covered for your own vehicle and for any personal accidents that occur whilst you are travelling.

When taking out car insurance, it is vital that you seek out a policy that will provide you with sufficient cover. Finding a car insurance policy that is right for you will help you to avoid the complications caused by problems such as accidents on the road or damage caused by vandalism, floods, storms or other severe weather conditions.

To increase your chances of finding a good car insurance policy, you will need to take the time to explore what is available. The many comparison websites available enable you to compare policies in order to find car insurance that is right for you. Obtaining and retrieving quotes is quick and simple and will enable you to save money on your car insurance.

Reading the terms and conditions of each policy will enable you to see what you will and will not be covered for. It is important that you read through your policy carefully to see whether or not there are any limitations. Comparing policies will enable you to seek out car insurance that suits your specific requirements.

If you have any special requirements, such as needing an insurance policy that covers younger drivers or those who use their car abroad regularly, then it is vital that you check that these special requirements are covered in your insurance policy. There are often limitations for younger drivers or those who travel regularly, so be sure to check your policy or consult your insurance provider to see what you will and will not be covered for. It may be that you need to upgrade your policy in order to ensure that you are fully covered. 

Car insurance comes primarily in three different types. You need one of these types in order to drive the vehicle legally on the road. There is a little-known law that allows you to leave a £250,000 deposit with the government in order to drive without insurance. For the majority of people, however, this is not an option. Competitive marketing is used to generate additional customers by offering various policy features. Ultimately, all policies tend to be categorized as one of three basic types.

Third party only insurance (“TPO”), is the least expensive form and indemnifies the damage caused to the third party in any accident, usually up to £5 million or £10 million. This includes items such as walls, houses, and individuals.

The second form is third party, fire, and theft (“TPFT”). This normally provides indemnity amounts between £100 and £500 for fire and theft. This is essentially a third party only cover that will also protect the vehicle being torched or otherwise set alight, as well as theft. It is slightly more expensive than TPO. Young or inexperienced drivers typically find that TPFT is the insurance best suited to their coverage needs.

In the past, comprehensive insurance was usually more expensive than TFPT or TPO. However, this has changed significantly in the past few years. Comprehensive insurance will cover any damage caused to your own car in an accident that was your fault. You will also have cover for damage caused by other people if you are unable to claim on that third party’s insurance. This lack of coverage is often a result of another driver being uninsured or having left the scene of the accident.

A no claims discount is becoming increasingly popular and a useful marketing tool among insurance companies, especially regarding car insurance. While household or classic car insurance does not have a complete no claims bonus system, motor insurance is offering dramatic discounts of up to 90% for not having a claim within a specific timeframe.

Many drivers will be eager to pay 90% less on their basic premium. However, the majority of premiums tend to fit onto a bell curve, which is standardised across a group of five to ten underwriters selling policies to around 80-90% of insurance broker companies. Therefore, a 90% no claims discount can mean that a policy will increase in price by 10% if multiple claims are presented. Even if an insurance policy includes a no claims discount protection clause, this only protects the portion of the policy subject to the discount. It does not protect the policyholder from additional risk resulting from subsequent or additional accidents.

When you take out an insurance policy, you should prepare yourself for the eventuality of having a claim. A low excess and a low maximum no claims discount might result in a policy premium that is 30% to 50% higher than a policy with 90% NCD and a £500 excess. In the likely event that you will one day have an insurance claim, however, it is crucial to have sufficient coverage. The alternative would be to abandon the insurance policy because of the high excess and potential jump in premium.

New drivers often find researching car insurance to be a complicated matter.  This is because most people are relatively uninformed about the motor insurance industry and do not understand what type of cover they actually require.  By making yourself aware of the basic types of insurance available for your vehicle and understanding your own needs, you will be better able to make an informed choice and ultimately purchase the most suitable product.

The most basic and inexpensive form of insurance is ‘Third Party’.  It is the minimum legal requirement for all vehicles that are on the road today in the United Kingdom.  This form of insurance will reimburse the other driver or a third party who is injured for any expenses incurred in an accident that is determined to be your fault.  Third party insurance does not, however, cover the cost of repairing your vehicle and will not cover you if your vehicle is stolen.

‘Third Party, Fire and Theft’ is one step up from basic third party cover.  This type of policy includes everything that ‘Third Party’ does, but also covers your vehicle in the event of theft or fire damage.  Often, this policy is not much more expensive than ‘Third Party’ and will give more cover for a reasonable premium.

Comprehensive insurance is much more expensive than the other most popular forms; however, it is also the one offers most protection in the case of an accident.  It not only provides all the cover included in ‘Third Party’ and ‘Third Party, Fire and Theft’ policies, but also the cost of repairing damage to your vehicle, even if the accident was your fault.