If you have a car, it is absolutely necessary to have car insurance. With the help of car insurance, you can protect your vehicle as well as yourself by receiving compensation if you are involved in an accident. In fact, drivers in the UK are legally required to carry liability insurance coverage in order to protect other drivers. When purchasing car insurance, however, it is beneficial to understand the various aspects of car insurance coverage as well as the factors that determine your premium amount. In that way, you can be certain to carry the proper type and amount of coverage to suit your needs.
Types of Car Insurance Coverage
In order to meet the minimum insurance requirements in the UK, you will need to carry Third Party Only insurance coverage. With this type of coverage, the damages and injuries that others sustain in an accident you caused are covered. This includes drivers of other vehicles, passengers in your vehicles and in the vehicles of others involved in the accident, as well as pedestrians. If you carry just Third Party Only coverage, your vehicle and your personal injuries are not protected.
If you want to give yourself a little extra protection, you might want to obtain Third Party Fire & Theft insurance. With this coverage, you meet your minimum liability requirements while also protecting yourself if your vehicle is stolen or if it catches on fire. If your car is damaged in an accident, however, your car still is not protected.
In order to provide your car with full coverage, you need to obtain Comprehensive insurance. With this coverage, damage to your vehicle is covered even if you caused the accident to occur. Comprehensive coverage will also provide you with coverage for medical expenses as well as the loss or damage of personal belongings that may have been damaged in the accident. Of course, there are limits set on how much of a payout you can receive for personal injury and loss or damage of personal belongings. You can negotiate these limits, but you will pay a higher insurance premium in order to increase the limits.
If you had to borrow money in order to purchase your vehicle, you might also want to acquire Guaranteed Asset Protection, or GAP, insurance. With this insurance, you will receive a payout equivalent to what you still owe on the car if it becomes totaled, even if that amount is more than the assessed value of the vehicle. Some will also provide you with money to help you make a deposit on a new car.
Factors Used to Determine Your Rates
A number of different factors are used to determine the rates you will have to pay for your car insurance. The main factors include:
Statistically, younger drivers are more likely to get into accidents. Therefore, if you are younger, you likely pay a higher insurance premium. Similarly, women file less claims than men, which mean women generally receive lower rates.
If you work at an occupation that requires spending a great deal of time on the road, your car insurance rates may be higher. If you plan to cover other drivers, their age, occupation, and gender will also have an impact on the rates you pay.
Of course, your personal driving record is also important when determining your rate. A clean driving record will result in lower rates. Those with speeding drunk driving convictions, on the other hand, can expect to pay higher rates. Similarly, cars that are more powerful or that are more expensive to repair will cost more to cover than smaller cars that are less expensive to repair.
Where you live will also have an impact on your rates. If you live in the country, you will usually pay less than someone that lives in the city. Rates also vary from one postcode to the next, as they are based on the crime statistics of each area. If you live in a high-risk area, you will pay higher rates. If you keep your car on the street, you will also pay more than someone that keeps it on the driveway. Those that keep their cars in garages, on the other hand, will get better rates than those that keep their cars in their driveways.