FAQ
Why do I need car insurance?
It seems that every time you do anything these days you are taking a risk, but it's fairly obvious that when you take to the road sheathed in a ton of metal which can do 100 mph, along with millions of other similarly-clad motorists, and factor in traffic lights, roundabouts and wildly variable road conditions, you are rather more at the sharp end of the whims of the gods than when changing a light bulb.
Car insurance is a way of levelling the odds in your favour – at least financially. The insurance company, in return for your payment to them of the insurance premium, contracts with you to recompense you in the event that specific accidents or incidents should occur. The insurance contract confers rights and obligations on both you and the insurance company and these are laid out explicitly.
The contract with the insurance company is often known as a Personal Auto Policy, or PAP. It will possibly include such clauses as the provision of a hire car to yourself if your car has to undergo repair following an accident.
What is a car insurance company?
With the proliferation of companies offering car insurance, middlemen brokering deals, and even supermarkets getting in on the wheeze, it is hard to know precisely which organisation you are doing business with. When you get your insurance policy you will only have a PAP with one distinct company. Any broker you have been dealing with becomes irrelevant – they will not be the ones who have to pay out should it become necessary to do so. Make sure you are fully aware who you are signing up with.
When it enters into a personal auto policy agreement with you, a car insurance company is essentially taking a gamble that you will keep paying money to them, and never have an accident. Of course, they will take every step to lessen the risk involved on their part. They can factor in a wide variety of information and if they determine that you probably are going to have an accident, or that the vehicle you drive is more likely to be stolen, then you will definitely have to pay a higher premium. Good for them, bad for you, but after all they are the ones who are taking a risk. Sadly, you must take out insurance by law so your side of the deal is set in stone: if you want to drive a car, you must take out car insurance. If you can't, you can't drive.
An insurance company in the UK will usually be overseen by the Financial Services Authority, which is the regulatory body that oversees the sale of financial products in this country. The Financial Services Authority (FSA) took over responsibility in this area from the General Insurance Standards Council in 2005.
What are the benefits of classic car insurance?
Firstly, to qualify for classic car insurance your vehicle should not be in use in a day-to-day capacity – the cut-off mileage for eligibility is 7500 miles per year. If your car covers more than that, classic car insurance is not the right product for you. Your car should also be over ten years old. Furthermore you should be aware that you do not get a no claims bonus with this type of insurance.
That said, if you fulfill these criteria you will find that classic car insurance will usually work out a fair bit cheaper. For one thing, the less mileage you do per annum, the cheaper your insurance will be. This is eminently suitable for the person who likes to take their cherished motor round the block on a Sunday afternoon but keeps it under lock and key for the rest of the week. You will also be able in most cases to specify a 'guaranteed value' for your car, reflecting the general condition of your car – this is unavailable with a general car insurance policy.
If you feel classic car insurance could apply to your situation then we're sure you'll be surprised by the savings you can make.
What are the benefits of shopping for and purchasing car insurance online?
The most obvious point to make here is that with a bricks and mortar insurance company, they have to pay for call centres, staff, infrastructure, plus the price of the calls if they are using 0800 numbers. The cost of developing a website able to handle online car insurance quotes is a miniscule fraction in comparison.
It therefore follows that any insurance company worth dealing with will offer an enticing discount to customers trying to buy their car insurance online – it is almost a given that if they don't, they are plowing money back into their profits – and some even add more discounts later if you renew your policy online as well.
Apart from discounts, the other benefit of getting online car insurance quotes is that you can fire off several applications for a quote and not have to deal with pushy telephone inquisitors who will pile on the pressure to get you to buy their insurance products. All you need do is sit back and wait to see what the best offers are. If you can buy online as well, you should be laughing all the way to the bank.
Some companies may also allow you to add or amend your policies online, making it very easy for you to add or remove insured drivers, or change vehicles named on the policies – this can be a boon if you need to make changes to your insurance policy in the middle of the night. Until recently such a notion was scarcely possible.
What does a car insurance group mean?
Whilst remembering that insurance companies are not bound to follow the car insurance group classifications when deciding how much to charge you, they certainly take them fully into consideration. The make and model, production run, body style, engine capacity, age, security specifications, fuel type, and gearbox (amongst other things) all go towards determining your car's insurance group. All vehicles in the UK are given an insurance group number by the Association Of British Insurers (ABI).
Other factors whch determine your premium are where you live, how old you are, your track record (no, not how fast you went round Brooklands), penalty points on your license, where you park and more besides.
If you are new to driving it would be better, unless you have deep pockets, to begin with a car from a lower insurance group – if you build up and maintain a careful claims-free profile with no penalty points, you should be able to move up the car insurance groups without significantly increasing your premium.
The car insurance group classifications run from 1 to 20, insurance group 20 being the most high powered vehicles such as the Porsche 911 sportscar whereas insurance group 1 contains vehicles such as the Fiat Panda.
Is car insurance for a woman cheaper?
According to analysis of the major insurance companies claims records, it is demonstrably true that the average accident caused by a man involves more damage, hence more money to put right, than the average accident caused by a women. It is often true then, that a woman will pay a fair bit less less than a man for exactly the same insurance cover, even on a vehicle further down the insurance group scale.
There are insurance companies out there who cater exclusively for women drivers, although some of these have been shown to offer no advantage whatsoever and appear to be set up purely on marketing lines. All-singing, all-dancing fluffy adverts may promise much but don't just blithely go along with it. Make sure you do your homework or you could end up being taken for a ride. There are many companies out there who have developed car insurance products specifically for lady drivers – if you aren't sure, ask.
Is it right to always look for the cheapest car insurance?
Not necessarily. It can easily work out that if you are paying less in one area such as the overall premium, hidden charges can creep in for other reasons. For example, if you anticipate adding or removing cars and drivers from your policy, then be sure you won't get charged extra for administration fees.
As always you have to keep a close eye on the small print, do a background check on the company in question, check to see if there are any testimonials about them you can read, and have a look at the online review centres to see what their reputation is. If you are fairly diligent (and since car insurance is compulsory you should strive to get yourself the most favourable terms) then you will walk away with a very good deal and save yourself a good bit of money.
How many car insurance quotes should I get?
It is always wise to get several quotes from various sources – don't assume that because a car insurance broker approaches different insurance companies they'll come back with the cheapest quote possible – there are many different relationships between brokers and insurance companies and premiums DO vary accordingly. Shop around and you may find two different quotes for exactly the same policy from exactly the same insurance provider.
You may even want to approach several brokers and the insurance companies themselves directly. It can't hurt to be too careful if there is a good bit of money at stake. We would suggest trying at least five different sources.
What is a car insurance broker?
Insurance brokers are, very specifically in the UK, members of the British Insurance Brokers' Association. If they are not, then they are legally not entitled to call themselves insurance brokers at all. They also operate independently and are therefore able to approach any insurance company and must put the interests of the customer first. You may wish to take a look at the BIBA website for more details but you can take it as read that a BIBA registered insurance broker is on 'your side' before anyone else's. If you want a very broad view of the policies available to you, use more than one insurance broker to approach the insurance panels.
Why is it difficult to get import car insurance?
Well, this isn't strictly true. Where an imported car is kitted out to UK spec, that is, where you would get exactly the same car from a UK dealer as the one you are importing, then there is absolutely no problem. The problems occur when you attempt to get car insurance for a vehicle which was not meant to go on sale in the UK; even when they look very much the same, some manufacturer's cars are markedly different with regards to components under the hood. From the insurer's point of view, getting replacements for certain car parts from abroad can be time-consuming and costly; engineers may not be certified or familiar with certain aspects of the vehicles and so on. Naturally this all leads to much greater expense for the insurers and as they seem to prefer avoiding even the faintest possibility of relinquishing more money than necessary, they will be wary of cutting an insurance policy deal in these instances.
Why is car insurance for young drivers so expensive?
This is perfectly natural, perfectly obvious and perfectly acceptable. Just going by statistics, young drivers have more accidents and make more insurance claims than older drivers. It goes without saying that insurance companies will up their premiums to reflect this unavoidable fact.
The younger driver will therefore need to think carefully and go for a sensible choice of car – rule out the turbo-charged performance car option, start from a low insurance group and start building up a no-claims record. That, as much as anything, will help to bring down the cost of the premium. Don't go for body kits and other shiny modifications either – these must all be declared and can add a hefty amount onto the final bill.
They may also want to consider eschewing the comprehensive cover if the car is old and inexpensive – third party car insurance will not cover the cost of the car in the case of an accident but if the car only cost a few hundred pounds in the first place, this is not such a bad deal and will lower your outlay.
Another option is to apply for a limited mileage cover policy. If you only need a runabout for a couple of days a week, this can also save you a fair bit of money.
Is modified car insurance difficult to source?
Compared to standard car insurance policies, it is going to be trickier to get hold of insurance for a modified car. It really boils down to what sort of modifications you have. Perhaps you have got yourself a fancy paint job? Would you want to choose a policy that acknowledges the cost of your flame-licked GTI and pay more premium as a result? It's certainly possible to find a policy that does this. Perhaps you've been squeezing out more power out of your engine with a fancy exhaust system? Again, this will need to be declared and taken into account. Certain modified car insurers will insert a clause which will cover you for the cost of agreed modifications, meaning that you will recover whatever it cost to modify your vehicle in the first place. This can be very useful if you've just spent a lot of money on a paint job which wouldn't necessarily add to the value of the car.
How many vehicles do you need to be eligible for fleet car insurance?
Broadly speaking, there would be no benefit in you getting fleet insurance unless you have at least half-a-dozen cars running. If you do have this many motors you will see the benefit of only having to deal with only one insurance policy and therefore only one premium – that can only be a good thing.
Fleet insurance also covers any cars that are owned by a company – all you need to do is let the insurance company know which vehicles are in use by your company and when (there will be clearly specified dates to provide for this) and they can make adjustments to your insurance premium as they see fit.. The cover is applied on a per-driver basis and you must declare any previous claims they have made or convictions they carry. It is very likely that there will be an age restriction on the policy, for instance, that none of the drivers may be under 21.
Note that individual drivers on a fleet car insurance policy do not earn a 'no claims' bonus – your company/fleet is judged on the cumulative claims of the fleet, not one the performance of one person. A handful of unsafe drivers can potentially wreak havoc on your insurance premium.
What is motor trade insurance?
Motor trade insurance caters for people who buy and sell vehicles as part of their trade. Since many hundreds of vehicles may pass through the hands of a car dealer, and they may often only possess a car for a few hours before selling it on, motor trade insurance takes this unusual state of affairs into account. It also makes provision for when you take a car for servicing and a garage employee might have to drive it around the garage for a brief period of time, or any other type of service which may well involve someone else driving your vehicle during the normal course of their work.
The best bet is to seek specialist advice in this instance. There are very many different reasons why motor trade insurance may be necessary and there are many different types of motor trade insurance which demonstrate this fact. Take your time and get an expert opinion.