Car Insurance Premiums
Car Insurance Premiums
Brian Bridges (Underwriter - Norwich Union) gives expert video advice on: How does my car's value affect my insurance?; How do I insure an antique or classic car?; Do I need to arrange insurance when I rent a car? and more...
What can help me lower the cost of my car insurance premium?
With car insurance premiums, to help lower the cost of the car insurance premium itself, it is very wise to give your insurance company or your broker as much information as you can. Then decide exactly how much use of the vehicle you need and what can you do over and above to protect the vehicle from loss or damage. For instance, can you garage the motor vehicle? Would you do a very limited mileage in a year? Are you prepared to fit an alarm or immobilizer to safeguard the vehicle from being stolen? Who really needs to drive the car? Is it just yourself, or maybe just yourself and a spouse? Do not ask for more cover than you really need, as the more the car insurance cover you have, the more the car insurance premium will cost.
What is a No Claims Bonus?
In car insurance premiums a no claims bonus, or as known in the industry, a no claims discount, is a discount from your car insurance premium to reflect the fact that you've had an insurance policy with either an existing insurer or a previous insurer and have not made an insurance claim. This is normally catered for in years, as opposed to an actual discount. So, one year, two year, three year, up to, normally, a maximum of five or six years, where the no claims discount will be at its maximum level.
What is a Protected No Claims Bonus?
You can, if you wish, protect your no claims discount. To protect a no claims discount, you will have to pay an additional premium. It rather depends on who the insurance company is, but what you tend to find that if you pay an additional premium of maybe 10 or 20 percent, you can protect your no claims discount in the event of a claim which is your fault. In most cases, this will mean that if you have two claims in five years, your no claims discount will not be reduced by your insurance company and you will still enjoy that discount at the next renewal. But you should always check with your insurance company or your insurance broker as to exactly what the offer is and what the additional premium will be.
What is an 'excess charge'?
An excess charge, or a policy excess, is an amount of money you agree to pay towards the cost of a claim to your car, irrespective of who is to blame. For example, if you agree to £1 excess and your car is damaged, you will have to pay the first £1 of that vehicle repair, irrespective of whose fault the claim was. You can of course claim this excess back if you're not at fault.
How does my car's value affect my insurance?
When dealing with car insurance premiums, the value of the car may affect the insurance. It does however depend on the insurance company and how they rate the premium. But in most cases, you will find that the value of your vehicle will not affect the premium, unless the value gets extremely high. So for instance, if you have a Ford Mondeo valued at 12,000 pounds, this will not affect the premium. However, if you have a vehicle such as an Aston Martin, at 120,000 pounds, then this additional value will affect the car insurance premium to a degree.
Does buying a car with extra safety features lower my premium?
With regards to car insurance premiums, buying a car with extra safety features may well reduce your car insurance premium. This is because each vehicle is allocated a car insurance group, and that car insurance group is built by various factors such as the car value, the car repair costs and indeed the car safety features. For that reason whilst safety features won't directly reduce the cost of your premium, it will have an end affect on the cost of your car insurance premium.
Should I insure my teenage child to drive my car?
You should think very carefully about this, because it is a sad fact that young people have more claims, and therefore insurance companies have to increase their premiums quite considerably. However, if there is a genuine need for your teenager to drive a vehicle, then you should talk to your insurance company or broker, advise him of the situation, advise of exactly the use that they will have, and they will give you an idea of the premium that you will have to pay. In such a circumstance, then, you can decide whether you wish to pay it, and if you do, they will be covered, but always be truthful with the insurance company or broker about exactly who owns the car and how much use your teenage child will have.
Is there a limit to third party liability insurance?
When it comes to car insurance premiums, there is not a limit to third party liability insurance. By law all insurance companies must offer unlimited injury liability insurance, this is purchased by the compulsory insurance that you buy or third party only insurance. In most cases, there will be a limit to the property liability insurance that you buy, but that will be probably about 20 million pounds. So you have no need to concern yourself at all when you buy third party only car insurance. You will be buying enough car insurance to ensure you will not be sued and held liable.
Will my car insurance cover me if I take my car abroad?
If you're going to take your vehicle abroad, you will have a concern over whether or not you are covered. By law, if you take your vehicle to any EU country, or indeed any country that's a signatory of what's known as the "Green Card Agreement," such as perhaps Norway or Switzerland, then you will always be covered under your policy for the minimum required liability cover in that country. However, most people will want to increase that cover to insure that their vehicle is also covered for damage, fire, or theft. You should talk to your insurance broker or your insurance company, and they will advise you whether that additional cover is included or whether you have to pay an additional premium to purchase it for the trip.
Do I need to arrange insurance when I rent a car?
With car insurance premiums, in the vast majority of cases you do not need to arrange insurance when you rent a car. The rental company will have arranged insurance for you, will advise you of this, and will ask you to sign on the form what is known as a “collision damage waiver” that covers the vehicle for damage. You will find that there may well be an excess, and it may be quite high, so you should inquire if you can reduce that excess by paying an additional car insurance premium. There may be a very occasional circumstance where the rental company won't insure you. If you have an existing policy, it might be worth talking to your broker to see whether the rental vehicle can be covered under your policy as a temporary additional vehicle. Some insurance companies may offer this; others may not, but make sure you ask.
What name should the insurance policy for a married couple be in?
If you're concerned about whose name the policy should be under, especially if you're married or have a partner, then you should talk to your insurance broker or your insurance company. Most of the insurance companies will ask that the policy be in the registered owner of the vehicle's name, but it isn't always necessary. You should simply advise your insurance broker, your company, the full facts and details, and they will advise you what you should do and in whose name the insurance policy should be correctly in.
If my vehicle is modified, will I need to declare it to my insurers?
If your vehicle is modified, then you must advise your insurance broker or your insurance company of these modifications and all the full details. It is quite possible that an additional premium may have to be paid, some insurance companies may not wish to cover you, but it is essential that you always advise the insurance broker or insurance company of full details of any changes to your car. You may well find that the changes are manufacturer specification, or changes to adapt the vehicle to physical abilities. In such cases, especially physical disabilities, you will not be charged a premium at all. However, if your vehicle has been modified for customized reasons or increased power, then you should expect an increased premium, but as always, it is vital that you advise your insurance provider of any changes to your car.
What is 'automatic coverage for new cars'?
Often when you buy a car from manufacturer or dealer, you will be offered 7 day free insurance, known as 'automatic coverage'. This will enable you to take the car off the forecourt, tax the car if necessary and spend a few days trying to decide what is the best car insurance option for you. To get this automatic car insurance coverage you will have to agree to receive an annual quote, and of course your details will then be entered into that insurance company's information data bank. However, that's all it is. It's free car insurance and probably worth while considering.
What do I need to do when I sell my car?
Immediately on selling your car you must contact your insurance provider or broker and inform them that a car has been sold. You must inform them straight away whether you wish to cancel the policy, suspend the policy or indeed replace the vehicle that you have sold with another car. This will mean that if the person that's purchased your car has an accident later on and hasn't arranged correct insurance, you will not in any way be liable and that your own insurer can refute any claim against them. Also, of course by law you need to inform the DVLA in Swansea and give them full details of the person that's purchased the vehicle from you, with their name and address.
Can I insure my teenager's car in my name to get cheaper cover?
If you're thinking of insuring your teenager's car in your name to get cheaper car insurance for them--then stop. To do this, you will almost definitely have to misrepresent to the insurance company; and this will mean that in the event of a claim, in all probability, your teenager will not be covered. This could mean that the damage to the vehicle, or indeed, costs against you for liability claims, will have to be met by yourself. This is known in the industry as "fronting." It's very serious, and you should not consider this act. And, in any event, it's far better for your teenager to build their own no-claims discount and insure the car correctly in their own name.
What is the Motor Insurance Bureau?
The 'Motor Insurance Bureau' is a fund, which all insurance companies that write insurance motor policies must contribute towards. This fund is a safety net so that in the event of a motorist being hit by an uninsured driver, that fund will act as an insurance company and pay claims for damage or injury to the person who's been hit by the uninsured motorist. It may well be that you have to prove that the person that's hit you is uninsured. As long as you can do so, then you will have redress against the 'Motor Insurance Bureau' and can seek compensation.
Why can woman get cheaper car insurance?
With regards to car insurance premiums, women drivers can get cheaper car insurance than male drivers simply because the claims cost to insurance companies is less for women-only drivers.