Top Up Your Car Insurance With Gap Insurance
Car insurance is there to give you financial protection in the event of an accident whether or not you are responsible for it. In the UK, car insurance is a compulsory as well as a necessary expense. You need a good car insurance policy for the financial protection it will afford you in the event of an automobile accident.
Sadly not all insurances include fixing the damages to your car, protecting against liability, legal fees or damage to any other property involved in the accident. Bolt-on niche insurance products such as inconvenience cover, gap insurance and even legal protection insurance can prove to be invaluable additions to your comprehensive car insurance to ensure an accident does not end up costing you more than you can afford should the worst happen.
Choosing the right car insurance will protect not only you, but your vehicle, and third parties in the long run. If you are planning to drive in the UK, you are required to purchase car insurance. Your level of protection will depend on the type of car insurance policy you choose to take out.
WHY YOU SHOULD SHOP AROUND FOR NEW CAR INSURANCE
Shopping around for car insurance is very important for several reasons:
• You may find better quotes
• Depreciation will affect the value of your car
• Your circumstances may have changed
• Financing could place your car in a greater risk banding
• You may be able to cover the loss of personal goods
• A different insurer may include breakdown cover in your policy
• You could find a policy which includes legal cover
• You may find an insurer covering your second car
• You may be offered an introductory discount
Just because you have used the same insurance company or insurance broker for several years, does not mean you are getting the best deal. It doesn’t always follow that the same company or broker can offer you the best deal for your insurance.
If your broker manages your entire insurance portfolio then he is in the best position to get you the best deal, as he already has information about your demands and needs. This is also the case with car insurance as they can often consolidate your insurance needs into an all inclusive package which most insurance companies only make available to brokers.
Car depreciation is a direct result of a vehicle’s age and usage. No sooner than you have driven your new car off the showroom floor the car begins to depreciate. The value of your car will decrease every year. Make sure that your insurance policy reflects this reduction in value. This is an obvious statement but can be surprisingly often forgotten. Check the value of your car against its blue book value rather than the price you paid - your broker can do this for you. This is because even fully comprehensive policies will only cover a vehicle to its blue book value rather than it’s purchase price. It is therefore important that this is what you declare the car’s value as. The more expensive a car is the more it can cost to insure. In rare cases the insurance company may offer a replacement car of the exact model or spec after an accident. There is however an insurance product called Vehicle Replacement Insurance which does just that! Click on the link to find out how it works in more detail.
At the time of your last renewal your circumstances may have been different. Perhaps you do not drive as far or often as you did, or perhaps your children have grown and want the keys to the car. Get insured according to any changes in circumstances - no matter how small you think they are. Insurance companies lower their prices for low mileage drivers and discounts can be significantYou can add additional drivers to your policy for relatively little expense, especially if you wait until it’s time to renew. By waiting until renewal time you may be able to avoid the administration costs of adding extra drivers.
WHICH LEVEL OF CAR INSURANCE IS THE BEST CHOICE?
Insurance cover in the UK falls into three different categories.
1. Third Party Insurance is mandatory in the UK. This type of cover insures a vehicle and driver against damage to another person’s car, driver or passengers if involved in an accident. Third Party Insurance acts as security against liabilities for damage to another person in a vehicle accident. This type of cover will not protect you against damage to yourself or your own car. You will not be reimbursed for repair costs with a third party only insurance policy.
2. Third Party, Fire and Theft Insurance will cover the benefits of third party insurance and includes any financial loss to the insured vehicle caused by fire or theft. For a vehicle that does not have a high market value, this is often the best cover for the average driver. A leased or financed vehicle will require a fully comprehensive insurance cover.
3. Fully Comprehensive Insurance offers the widest coverage.Damage to your car, and personal injury caused by an accident, as well as the basics of third party, fire and theft, are covered by a comprehensive car insurance policy. If the vehicle value is higher than the insured can afford to pay to replace it, then fully comprehensive is the preferred choice. There are specialised insurance products like Finance Gap or Vehicle Replacement Gap which can top up the gap between what your insurance company will pay out and the cost of getting a new car - you can find out more online by doing a simple search.
Many factors affect car insurance and most insurance companies offer a range of secondary covers to meet the varied and specialized needs of the policyholder.
FACTORS AFFECTING CAR INSURANCE
1. The Policyholder
• Age of the policyholder
• Gender of the policyholder
• Are you married or single
• As a policy holder your address affects your premium
• How big the car is
• How much your car will cost to replace
• Any modifications that have been made to the vehicle by its owner
A younger less experienced driver will pay a higher insurance premium than someone with several years driving experience.
A married personis considered more responsible for their actions than a person is with no commitments. It stands to reason that a married man with children has more responsibilities and the insurance companies will therefore consider this person a lower risk than a single male in his early twenties driving a WRX.
Where a person lives also affects the insurance cost. Motorists living in rural locations and in areas with a low crime rate are more likely to get a lower insurance premium than those living in cities.
A powerful car is more likely to lose control at the hands of younger drivers: expensive cars cost a lot to replace if scrapped and should they simply require repairs the sum of the replacement parts often costs more than the used car’s value, making more powerful cars very expensive to ensure.
Modifications are more likely to alter the vehicles safety; performance is improved, and handling may be compromised making the vehicle more unpredictable. An increase in insurance premiums should be expected with car modifications, as these represent an increased risk to the insurer.
2. Driver History
• Years of driving experience
• Claims made in previous years
• History of driving convictions
• Annual mileage
The number of years a person has been driving suggests their understanding of the rules of the road, shows the driver has built up experience of driving under varied driving conditions and has attained a certain level of confidence while behind the wheel. Insurance companies base these assumptions on the policyholder’s claims history over the last five years. Driving convictions such as speeding, dangerous driving or drink diving will affect the premium. Most parking violations are not taken in to account.
Your annual mileage is a factor too. The risk of having an accident increases the longer a vehicle is on the road.
3. Vehicle History
• Current vehicle value
• Is the car owned, leased or financed
• Vehicle make and model
• Engine capacity and performance
• Modifications to the vehicle
If the vehicle has a low book value, it may not seem to be cost effective to pay for comprehensive insurance; however this is not necessarily the case. If the named driver has several years no claims then fully comprehensive insurance could actually cost the same as third party fire and theft cover, but with additional perks such as windscreen cover and legal assistance etc. When buying online you may find that additional benefits can be included at little increased cost to you. Fully comprehensive insurance cover will be required for leased or financed vehicles. You need to be able to reimburse the leasing or finance company for any damage to the car. This will be covered if you have fully comprehensive insurance.
There may be other benefits included in your car insurance policy, which are not always necessary but sometimes advisable:
• Breakdown insurance
• Courtesy vehicle
• Breakdown assistance
• Specialist legal advice/assistance with legal fees
• Cover for your windscreen
• NCD protection
• Compulsory or voluntary deductible amount
Choosing the correct insurance and getting the best quote can be daunting as there are so many variables to consider. If a website was built properly its users will find it easy to get a great price quickly and easily. Consider using an insurance aggregator website for your initial quotes. The average insurance buyer finds aggregator websites easy to use. You only need to answer the questions once, and then they will select products to show you based on your answers. After the site has collected the quotes, you can then compare different policies, as well as being able to save your quote, amend your requirements if necessary and if you are happy you can then buy online. It’s always a good idea to find out if your broker can get you a better deal first, so keep him posted on your findings. Remember that you need to compare quotes on a like-for-like basis. It could be more complicated than you at first think. Good luck on finding the best policy for your needs.
Tags: auto insurance, car depreciation, car insurance, gap insurance, motor insurance, vehicle replacement insurance