The cost of motor insurance can vary significantly between insurance companies. Make sure you get a number of quotes before you purchase. However, make sure you are comparing like-for-like; check carefully to see what each policy covers, and excludes.
Excesses
An excess is the first portion of a claim you will be responsible for paying. The insurer will only pay out on the amount above the excess. Agreeing to a higher excess level (the amount you have to pay) will normally mean paying a lower premium. Of course, this means that it will cost you more if you have to make a claim. Make sure that you will be able to afford the excess in the event of a claim.
There may be a number of varying excesses in one policy, and different excesses might apply depending on whether a claim is for accidental damage or theft. Windscreen replacement claims usually have a separate excess.
Policy Limits
Most insurance policies have maximum limits that they will pay out in a claim. Make sure you are aware of the cover limits of your policy, and that the maximum insured would be sufficient to cover your loss.
Insured Drivers
Your insurers will want to know details of anyone who is likely to drive the car- particularly their age, occupation, experience, claims and driving record. The fewer people on the policy, the cheaper the premium will be.
Vehicle Use
Your policy and certificate will state the uses for which your car is insured. Most policies will not cover you for driving your car for business use, and will state that the car is to be used for "social, domestic and pleasure". You must let your insurer know if you need to use your car for business purposes. Failure to do so could lead to any future claim being rejected.
No Claims Discount
Insurance companies reward careful drivers with no-claims discounts (NCD), also known as a no-claims bonus (NCB). Policyholders with a claim free record will normally qualify for a premium discount. Discounts and scales tend to vary from one company to another, but can range from 30% for one claim free year up to 65% or more after four or five years. If you're a new driver, find a company that offers competitive rates to drivers seeking insurance for the first time.
Protected Discount
For an extra premium, a number of claims are allowed without affecting your no claims discount: typically two claims within a three to five year period.
Guaranteed Asset Protection (GAP) Insurance
This will give you added protection if your car is written off. If you are buying your car with a finance agreement, GAP insurance pays out the difference between the vehicle�s pre-accident value and your outstanding loan.
Some products may also pay for the cost of replacing your car with the current equivalent. If you haven�t taken out a loan, there are other types of GAP insurance that will pay out the difference between the original purchase price and the car�s pre-accident value.
Legal Expenses Insurance
If you are involved in an accident that isn�t your fault, this extension could help you to recover your uninsured losses, such as your excess, from the liable party.
Exclusions
There are some common exclusions to car insurance policies that you should be aware of:
Theft by Deception
Your insurance policy will usually not cover your loss if your car is taken from you by deception. This means that if you are selling your car, you must make sure you receive proper payment before parting with it.
Driving Other Cars
Although many comprehensive policies cover you whilst driving a car that belongs to someone else, cover will be limited to third party only. This means that any accidental damage to the borrowed car will not be covered by your insurance.
If you need to drive someone else's car, ask the owner to add you to their policy as a named driver. Any claims involving their car while you are driving will then be met by their policy.
Similarly, think carefully before letting someone else drive your car, and ensure that you are comfortable with the insurance implications of doing so.
