A guide to car insurance

Whether you like it or not, you need to insure your vehicle before you sit in the driving seat, it is a legal requirement. So as you are obliged to take out cover for your car, you might as well make the most of it. This guide explains why you need insurance and which policy is best for you with a few money saving tips.

Insurance terminology

Policy – this is a contract of your insurance terms

Premium – this is the amount you pay to insure your vehicle

Excess – this is a set amount of money you pay when you make a claim

Third party – this is a policy which covers any vehicles involved apart from your own if the accident is your fault

Fully comprehensive – this is a policy which covers all vehicles regardless of who is to blame for the accident

Why do you need insurance?

You need insurance to cover any costs incurred in the event of an accident if it is deemed your fault; this may be to repair the vehicles involved or maybe cover compensation if anyone is injured. The cost of repairing a car or paying compensation can be very expensive so by paying monthly premiums you are ensuring you aren't as badly hit financially in the event of an accident.

What policy is best for me?

Third party (fire and theft) cover has a lot less expensive premiums than fully comprehensive as it covers a lot less than its alternative. Third party insurance covers liability for personal injuries to anyone involved (even passengers in your car) and any damage you have caused to another vehicle involved, you are also covered if your car is stolen or catches fire. This is recommended if your vehicle is of low value.

Fully comprehensive insurance covers your vehicle and any other people in the event of an accident regardless of blame, it pretty much covers everything. This is recommended if your vehicle is of high value.

So now you understand why you need insurance and have an idea as to which insurance policy is best for you, here are a few tips how to lower your premiums:

Chose your car carefully – different cars fall under different insurance bands, the newest car in the showroom may be in your price range but you will need to check if you can insure it. Cheaper cars with smaller engines have the lowest premiums.

Leave the modifications – your premiums are based on how likely you are to make a claim, a modified car with a finely tuned engine will not only look nice to you, but also to thieves and you are also more likely to speed, therefore you are more likely to have an accident. Leave modifications to a minimum to have reduced premiums.

Pay a higher excess – this can reduce your premiums by up to 10%.

Pay it at once – paying for your cover in one lump some will be cheaper than paying it off monthly, if you can afford to pay it off in one go then do it.

Pay for what you drive – do not insure your car for 15,000 miles when you only drive 10,000, this will affect the price you pay.

Be secure – if you have a garage or driveway park your car there; if your car does not have immobilisers as standard, install them and let your insurance company know. Doing so makes it harder to steal and will therefore lower your premium.

Change providers – providers offer discounted rates for new business so it is wise to change your provider every couple of years

Compare quotes – there are a lot of insurance providers on the market with quotes differing drastically, choosing the right one may save you hundreds of pounds over the year. Use online comparison sites as this provides instant results.

When comparing your quotes you need to ensure you look at other things than the cost, some may be cheaper but may not cover you if you travel abroad or offer a courtesy car in the event of an accident.

Pay attention to the details of the insurance policy and ensure you fill out any paper work appropriately; any errors may void the policy when making a claim.

Follow these points to get the most out of your car insurance policy.

See more about Esprit friendly insurers here.