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Motor Insurance Explained

Why do I need Motor Insurance?

All motorists must be insured against their liability to other people, as stipulated in the Road Traffic Act 1988. Motor insurance is a legal requirement for any vehicle which is kept on the street, on a driveway or in a garage, unless you have a SORN (Statutory Off Road Notification) giving permission to keep it uninsured and off the road. Although cover is mandatory, you do have a choice of the type of policy you buy. The three types of cover available are: comprehensive, third party, and third party fire and theft.

Driving without motor insurance is Illegal. If you don’t have it, you could be fined or disqualified from driving. The maximum fine is £5,000, in addition you will receive at least six penalty on your licence. Also the police have the power to seize and destroy any vehicle being driven without cover.

What is Fully Comprehensive insurance?

Fully Comprehensive car insurance offers the most complete level of car insurance available.

It covers you if your car is damaged whether it was your fault, fault cannot be proven or someone else damages your car and either is not insured or leaves the scene without giving details. It also provides cover if your car is stolen or damaged by fire.

You’re also covered for claims made against you by other people for damage to their property or bodily injury.

Some policies can include other useful cover such as:

  • cover for your own death or injury, or that of your partner or other member of your family, up to a limited amount
  • cover for your personal belongings if they are stolen from your vehicle or damaged
  • cover for your medical and legal expenses
  • hiring a replacement vehicle.

It may include cover for driving someone else’s car, but typically this is limited to third party where included. Always check your policy details.

What does Third Party, Fire and Theft Insurance cover?

This covers you if your car is damaged by fire stolen, and if other people claim against you for injury or damage to their car or property.

However it provides no cover against damage to your vehicle, unless you can prove it was someone else’s fault and their insurer pays out.

What does Third Party only insurance cover?

This is the minimum cover available by law, and covers you for your legal liability to third parties, for example, claims made by other people against you, for bodily injury or damage to their property.

However you have no insurance against damage to your vehicle (unless the other party’s insurance pays out) and fire or theft.

What information will I need to get a quote for car insurance?

  1. Details of the car – the registration number isn’t needed to get a quote, but you will need to provide it when you are ready to buy your insurance. You will also need to declare any modifications made to the car.
  2. No Claim bonus (NCB) – could give you up to 75% discount on your insurance. Generally, 5years is the maximum NCB, but some companies discount up to 8 years or more.
  3. Driving licence and conviction s – The type of licence, how long you’ve held it and details of any speeding tickets, points or disqualifications you’ve had in the last 5 years.
  4. Details of any other drivers – You’ll need the full names and possibly licence details to add them to any policy
  5. Previous claims or accidents – if you’ve been in an accident or raised a claim in the last 5 years, you’ll need details of the date, claim cost and accident type.

Types of use explained

When compiling cheap car insurance quotes, insurers rate your car under one of four categories of use. Cars which only have social, domestic or pleasure-related uses tend to qualify for cheap car insurance. The more the car is used, the higher the premium will be.

  1. Social, domestic or pleasure – related uses. This covers drivers for normal day-to-day driving, such as a visit to family, friends or to go shopping.
  2. Commuting - This covers a drive to and from the normal place of work, and includes travelling and parking at a railway station.
  3. Business use - This covers using your car in connection with your job, such as driving to different sites away from your place of work.
  4. Commercial travelling - This covers the car to be used for such things as door-to-door sales.

Insurance do’s and don’ts

Do be honest and answer questions fully as you may not be able to claim on your policy.

Do make sure you are aware of the consequences of getting your insurance wrong as you could be left with unexpected legal expenses or worse still uninsured or both.

Do ensure that if the vehicle has been bought on credit it is insured in the name of the person who has taken out the credit agreement or that you have agreement from the finance provider of any exception.

Don’t specify someone as an additional driver if they are the main driver (may be tempting if the main driver is young or has points on their licence) as this is fraud and can also invalidate your insurance.