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Third Party Car Insurance

Questions to ask when buying Car Insurance

The following points will usually heavily affect the price of your insurance policy. Make sure you have taken account of them when you factor in the benefits to the price.

Your No-Claims Discount

Each year you are insured and do not claim on a policy will increase your "no-claims discount" (NCD). Insurance companies offer a discount which is better, the longer you don't claim, starting with a one year discount of 30% rising each year to a maximum of 60% discount. If you do then claim, your discount is usually reduced by an amount such as 20%. Figures will vary and it is often worth checking what the company's policy is. Some companies will allow you to protect your NCD by paying a small extra premium. Claiming for windscreen replacement does not usually affect your NCD. Insuring a second car does not usually take into account your existing NCD.

Policy Limits or Excesses

If you ever need to make a claim on a policy, you will usually have to pay a proportion of the claim yourself. This proportion is called the excess and maybe anything from £50 upwards. It may depend on various factors and you may be able to reduce it by including extra security measures. Many companies will quote different excesses depending on the nature of the claim, e.g. whether the car has been in an accident, or was stolen. There is usually a different excess for windscreen replacement claims. Also, check if there is a limit, over which the company will not pay. Both of these can affect the cost of the policy to you.

Named Drivers

The policy will usually have "named" drivers or may allow any drivers over a certain age. Reducing the number of drivers, or excluding drivers under a certain age will reduce your premium. For example, if you are aged 46, and you include a relative on the policy aged 18, your policy cost is likely to be far higher.

Use of vehicle

Most policies include the standard use of private mileage with travel to and from a permanent place of work. If you use the vehicle for work purposes, such as delivering goods or travelling to meetings you must declare this in order to be covered, and your policy will likely be more expensive.

Guaranteed Asset Protection Insurance (GAP)

This is usually a requirement if you use a finance agreement to purchase your car, as the amount you are able to claim on your policy may not cover the amount of the existing finance. In such a case, the GAP insurance will pay the difference.

Exclusions

Theft by Deception

Your insurance policy will not usually cover you if you are deceived into handing over your car without force. Make sure if you sell your car, that you receive cleared payment in full before you hand over the car. A cheque is not cleared payment, as it can bounce in some case upto months later, if it is found to be a fraudulent or stolen cheque. Cash or a direc tbank transfer is safer, but again, ensure that a bank transfer is exactly that, and not a cheque paid into a branch.

Driving other cars

Although your policy may cover you to drive cars not owned by you, the cover is usually restricted to 'third-party only', which means if you do have an accident, you will be liable for the cost of repair, even if you have 'comprehensive' cover on your own vehicle. If you are driving a vehicle not owned by yourself, it is usually possible for the owner to include you temporariliy on his/her policy as a named driver with comprehensive cover.

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