• April 5, 2013

Types of Car Insurance in the UK

car-insuranceTaking out car insurance is a legal requirement before you can drive on roads or any other public spaces in the UK. Beyond that, insurance protects you against financial liabilities if you injure someone else or damage their vehicle or other property while driving. Depending on the policy and situation, it can also cover you against loss or damage to your own vehicle and property.

Levels of car insurance

Car insurance comes in three basic levels.

1. Third Party Only

Third party only insurance ensures that compensation is available if you injure other people (or damage their property). It does not cover you for damage to your vehicle or property, even if an accident was not your fault. If someone else was to blame, you would pursue the claim through their insurance. This is the minimum level of cover required by law.

2. Third Party, Fire and Theft

Third party, fire and theft also covers you if your car is stolen, damaged in a break-in attempt or set on fire.

3. Comprehensive

Comprehensive car insurance offers all the above protection but it also covers you for injury or damage to your own vehicle or property, even if an accident was your fault.

Lowering your premiums

Car insurance premiums can represent a substantial chunk of your monthly or annual driving costs but there are ways to reduce these costs.  Younger drivers in particular may benefit from the relatively new telematics technology – a ‘black box’ that is fitted to your vehicle and monitors your driving habits. The idea is that drivers who prove they are safe and responsible can benefit from lower premiums, whatever their age.

Voluntary excess

Raising your voluntary excess can also help lower your regular premiums. The excess is the amount you have to pay towards any individual claim. If, for example, you had an excess of £250 and made a claim for £2,000 of repairs, you would have to pay £250 towards the repairs. Your insurer would pick up the remaining £1,750.

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