iQep: Insurance & Finance

Car insurance often costs less because many people build up what is called a no-claims bonus.  A no-claims bonus is a discount people get when they purchase their car insurance and the amount of savings is dependent on whether the person has made any previous claims.  There are no-claims bonus builds up after a number of years, and each year that you don’t make any claims you will receive a discount on your next year’s car insurance.  After around four or five years you could have up to 75% off the cost of your car insurance.  

What’s great about a no-claims bonus is that even if you decide to change car insurers you can still receive your no-claims discount.  Additionally, some car insurers offer the chance for named drivers on a vehicle to earn their own no-claims bonus, which means that when they take out their own policy they will be able to save money.

If something happens which is your fault, and your insurers need to pay out for it then you will lose your no-claims bonus.  This means that the following year your insurance will be more expensive.  This is why a number of people chose not to use their insurance to pay for damages to other vehicles or themselves, because it might be cheaper to just pay the price of the damage.  However, many insurers offer the chance to protect your no-claims bonus for an additional fee even if you have made a claim or someone has made a claim against you.

With such a lot of car insurers out there, buying car insurance may seem a little overwhelming and you’ll be forgiven for not knowing where to start.  This article provides you with information on how to buy car insurance.

Getting a Quote

You can obtain a quote from different insurers fairly easily via the internet.  All you need to do is use an insurance comparison site and type in specific details about the car you wish to insure.  You will then be given a list of quotes from different insurers which you can look through to find the best policy for your requirements.  Alternatively you can ring the insurance company directly and discuss your policy needs with them.  Sometimes this is preferable if you want to ask questions about the policy.

Information Needed when Requesting a Quote

The quote price is based on a number of different factors of information that you give to the insurers.  These factors are,  vehicle details, what the vehicle will be used for, where the vehicle will be kept, the ages and occupations of the people who will be driving the vehicle, any penalty points on your licence or convictions for driving offences, any no-claims bonus you have and how long you have been driving for, and any recent insurance claims.  When you request a quote you should have this information to hand, so that an accurate quote can be given.

When you have found a policy from an insurer and you’re happy with the terms and conditions, you’re ready to go ahead and buy the insurance for your vehicle.

In-car audio equipment can often be a confusing area when it comes to buying car insurance.  It is important to ensure that your car insurance covers custom car audio equipment, as it is often expensive to purchase and install.  There will usually be a limit on the value of the equipment that can be covered in a policy, or a policy may not cover audio equipment at all.  The maximum limit is often £500 pounds, which could cover the equipment in a mid-range car audio installation.  A complete system may often exceed this value, particularly if separate sub-woofers, main speakers and tweeters are installed with multiple amplifiers.  If a person had fitted a system like this, it would exceed the £500 pound limit that is common to most policies.  In this scenario, it might be wiser to seek a specialist insurer who will offer a higher level of cover.

The security of the car is also very important, as many insurers will not pay out on a claim if the car was not properly secured.  For example, if the car was left unattended with the doors unlocked, or if easily removable equipment was prominently on display, insurers might refuse the claim.  Policy details should always be checked to ensure the appropriate conditions are covered.

Insurance excess should also be taken into account.  There is little value in claiming on insurance should the excess be £200 pounds and the value of the stolen equipment is also £200 pounds.

If you want to drive on public roads in the UK then your motor vehicle will need insurance.  There are many car insurance companies available, and each offers their own incentives for you to take a policy out with them.

When you are taking out a car insurance policy you need to ensure it will cover you for any eventuality, otherwise you may well end up out of pocket for hundreds of pounds.  The best car insurance policy is the fully comprehensive policy offered by all insurance companies.  As the name suggests it is the most comprehensive policy available.  Be aware that each insurance company will have their own added benefits so shopping around is a must.

With a fully comprehensive car insurance policy you will be covered for damage to your car as well as any damage to the third party’s property and any personal injury.  On top of that, most fully comprehensive policies also include a courtesy car for when your car is off the road being repaired or assessed.  The policy usually includes a certain level of legal cover, although this does vary between insurance companies.

Fully comprehensive insurance policies as with other car insurance policies will have an excess limit, meaning that if your excess is £200.00 then you have to pay the first £200.00 of any repair yourself.  There are now many policies that for a slightly higher premium come with a no excess clause, this means the whole repair will be covered by the policy.

As more and more people turn to the internet to purchase financial products it is not surprising that car insurance companies have made their most attractive products available online.  It is also true that many of the cheapest deals are available to individuals who purchase their own insurance without using a professional intermediary, such as an insurance broker. 

When looking for car insurance online it is important to remember to refer to as many insurance company websites as possible, in order to ensure that you get the best deal available.  It is also useful to access comparison websites when a policy is found that is of interest.  In this way, the payment of any unnecessary commission that may be included in quotes from one particular site will be avoided.

When an application for car insurance is made online, the same considerations apply as when purchasing cover through a broker.  As with all insurance policy applications, it is necessary to disclose all the appropriate information requested by the insurer.  Failure to do this may result in the policy being invalidated, which could complicate matters if a claim has to be made. 

When applying for car insurance online it is a good idea for you to familiarise yourself with all the details of the policy being offered.  Very often, the cheapest quote found through online research will not be the most suitable once any disclaimers or limitations on the policy are taken into account.

In the United Kingdom, it is a legal requirement that anyone driving a vehicle on public roads should have an insurance policy that covers, at a minimum, third party insurance that will compensate for damage or loss suffered by a third party.  Even so, it is possible that a driver may suffer injury or loss as a result of, for example, a collision with a driver who is not in possession of a valid insurance policy.

This would be a serious situation for both, because the uninsured driver would be guilty of breaking the law and subject to a fine or even imprisonment and the third party driver could be facing a potentially significant financial loss, especially if they were to be seriously injured.

It is situations such as this that the Motor Insurers’ Bureau has been designed to address.  Costs for damage can be processed through the Motor Insurers’ Bureau in cases where the accident was caused by an uninsured driver; where the accident was a so-called ‘hit and run’ incident in which the driver at fault cannot be traced or where the accident involved negligence on behalf of a foreign driver covered by a foreign insurer that may potentially be difficult or impossible to contact.

A basic level of vehicle insurance is, as has been previously stated, compulsory for all drivers in the UK, but it is of some comfort to know that there is a fallback position for an innocent driver who is involved in an accident with someone who has failed to fulfil their legal obligations.

Car insurance can be expensive, but given the potential cost of having to replace your vehicle in the event of, for example, fire or theft, the price of the cover can be put into some sort of perspective.  Even so, the costs of adequate insurance can still be very high and insurance companies offer a flexible approach so that a number of factors, such as type of car and age of driver, are taken into account when calculating the premium to be paid.  This allows the driver to meet the needs of the law, be covered in the event of an accident and also enjoy some peace of mind.

One of the factors involved in setting the level of premium, in terms of the type of car, is the average amount that the insurer would have to pay out against any claim for damage made in relation to that particular make or model.  For example, if your car has standard parts that can be cheaply and easily replaced or repaired, the cost of the insurance will be lower than for a high-performance car, for which parts are more difficult to come by and in extreme cases, may even need to be specially made or imported from overseas.

The other major factor is the driver’s age and this increases the younger the driver is, based on statistical data that shows younger drivers are more frequently involved in road accidents.  Insurance companies are commercial enterprises and must make a profit if they are to survive.  It is therefore clear that they have to cover their own liabilities in high-risk cases.