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Which Car Insurance Policy is Right for You?

Which car insurance policy is right for you?

Buying a car insurance policy, particularly for the first time can mean you need to make a number of decisions. As with most financial products, it is important to understand the differences between the policies available, how it can affect you, and how it can affect other road users.

Comprehensive car insurance
This type of cover, as is appropriately named, provides the policyholder with a comprehensive, or complete, 'all risks' cover for your car. In its simplest terms it means that you are able to claim for any damage caused to your car, apart from those exclusions you agreed with your insurer. Exclusions vary dependent on the insurer but may include items like legal fees, breakdown cover, windscreen damage, and medical fees.

Despite exclusions, a comprehensive policy still means comprehensive. You may be aware that you can claim for the damage caused by an accident to your car, but did you know it is also possible to make a claim for more minor damage that can happen to your car. For example if your car is parked and another driver drove past and knocked off your wing mirror you would be able to make a claim, even if the other driver did not leave their details. However, if you do decide to make such a claim, check the minimum excess payment required, and the effect the claim will have on your premium. For minor damage it is usually cheaper to pay for it yourself.

Excess must be paid no matter what damage occurs to your car, or for whatever reason the claim. You have to pay it because you have entered in to a legal contract where you have agreed to pay the initial amount of any claim. If you were not at fault though, you can claim it back from the other party's insurance company.

In addition to all this, there is the windscreen extension. Whilst some third party fire and theft policies will allow you to add this on in return for an extra premium, comprehensive cover has this included. Your insurer will have a deal with a specialist glass firm, and assuming you go there, you will pay only the excess, which is normally less than the excess on other damage in your policy (usually about �50). Should you get a small chip or crack, you can get it repaired for nothing with no excess.

What does Comprehensive Insurance not cover?
No policy will ever cover you for every single thing. 'Comprehensive' and 'all risks' can be misleading and give a false impression. On almost every policy, you will find exclusions relating to your excess, loss of use, electrical and mechanical breakdowns, and wear and tear.

What to watch for
Always look for items such as a 'loss of use' clause or a 'courtesy car' clause whilst your car is being repaired? What happens if your new car is written off, or even loses 50 or 60% of its value because of the accident? A good insurance policy will give you a new car in this case as long as your car was less than 12 months old. Dependent on the insurer, your audio equipment will receive different levels of cover. Some will pay out the full amount, whilst others have limits. The same will also apply to personal effects or valuables in the car, insurers will usually only pay up to a limit of �150.

Thirds Party Fire and Theft
Third party only car insurance policies provide the minimum legal requirement. They are designed to protect victims of accidents in which your car is involved. A third party policy can also cover your legal fees in case you require a solicitor to represent you. Should your car sustain damage caused by a fire, your policy does provide limited protection. In order to sustain such damage it is highly likely that you car will have been stolen and set alight to destroy any evidence.

Third Party Only Insurance
By law, as far as the Road Traffic Act(s) are concerned, you need to have a minimum level of car insurance. Third party only car insurance will only cover your liability to others. There is no cover for damage to yourself or your vehicle. Third party only insurance will also cover you to drive other cars on a third party basis. Look carefully at the terms and conditions of your policy for this reason. The policy will tell you whether you can drive another car, and whether someone else can drive your car.

If you are found to be guilty of causing an accident your insurer will pay any compensation to any injured victims of the accident. Any legal costs are covered, and paid to the solicitors of the victims as well as the legal costs that your own insurer incurs representing you. However, if you are involved in an accident in which you are the passenger, third party insurance will only cover the driver. You can claim compensation from the person driving your car should their negligent driving cause you injury. This is because the policy indemnifies the driver. What the third party policy doesn't cover is the damage to your car whoever is driving it.

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