Articles

Post Office™ Articles

Car Insurance: The Basics

Before you buy your insurance policy, it’s worth taking a little time to understand the basics. There are three levels of insurance: third party; third party fire and theft; and, comprehensive.

Third party is the least cover you are obliged to take out to drive a car in the U.K. This is a legal requirement, not just good advice. But bear in mind that it only covers you against a claim from the person that you’ve hit, if the blame lies with you, or indeed, as often happens, both parties are jointly to blame. Your policy is there to cover their repairs and as such, will not provide you with any recompense for your own vehicle. If it’s badly damaged, or written off, then it comes out of your pocket to repair.

A third party insurance would usually also cover injured passengers in your car and those passengers in the other car. It will also cover a certain amount of your emergency medical costs as well, but not long-term medical bills.

Okay, so if you’re looking for the cheapest legal option, Third Party is the great option. And for many groups of drivers, including students, young men, or those just passed their test, it can be the most cost-effective way of getting onto the road.

But, bear in mind the cost of your vehicle. If you think you can stand the cost of replacement, then fair enough, but if your vehicle has a large value, then you would do well to think of a higher grade of insurance.

Third Party Fire & Theft is what is says on the packet. You get third party cover, plus the optional benefit of being covered for damage to your vehicle from attempted theft, or fire. Car theft is common in certain areas, so this upgraded third party cover could be a distinct advantage.

The third option is Comprehensive. Now, this covers you for all those third party items, but, importantly covers accidental and malicious damage to your car. In effect, you can claim the money back for repairing your car if the accident was your fault. You also get greater personal accident cover for your passengers and greater help with long term medical care. You can also get replacement cover for your windscreen.

Now, this is not a situation of what you see is what you get. As with all insurance policies, it pays hugely to get a policy that suits your lifestyle and one that does as it says. And, always read the small print. Within each level of the three insurances, there are a numerous variables and options.

And of course, there’s the no-claim bonus. The concept here is that if you don’t make a claim on your policy, that translates to a supposed better driving style, and you deserve lower cost insurance. When getting an insurance quote, you will be asked for, and have to prove, you have made no claims for x amount of years.

You might have claimed in the past of course and therefore have no years of no-claims to barter with. Once again, there are numerous options and variables when thinking about no-claim bonuses, with some companies agreeing to protect your no-claim status, even in the event of making a claim.

As always, take a close look at what you’re being offered.

The car insurance basics are quite easy to grasp, the devil, as they say, is in the detail.

Look today to find the best deals on car insurance online.

Click here to find out the best deals on car insurance provided by The Post Office™.