Car insurance is a legal requirement and without it you could end up in prison or faced with a hefty fine and a driving ban. People who drive without car insurance are not only putting themselves at risk but others too.There are many different types of coverage available to suit all needs and budgets, but for most people the level of coverage that they take is based upon what they can afford. It is important to remember that you must have at least basic coverage by law before you can take your vehicle out on the road.
The more comprehensive and feature-rich your policy, the higher your premiums will be, but at the same time you will also have a much higher degree of protection against an array of eventualities.
The three main levels of car insurance cover are:
Third Party
Third party car insurance cover is the absolute minimum level that is legally required. The cheapest of all three options, third party car insurance policies are often taken out by first time drivers that are teenagers without much money to spend on insurance and whose cars are not worth much money. Third party car insurance covers for:
* Injuries to other people including passengers in your vehicle.
* Damage to other peoples' property/vehicle
Third party car insurance does not cover for:
* Damage to your property/vehicle caused by you.
* Theft of your vehicle.
Third party only car insurance is usually recommended to people whose vehicles are worth less than £500 and is ideal if money is tight and you are not bothered about damage to your vehicle.
Third Party Fire and Theft
This is the next level of car insurance and pretty self explanatory. Third party fire and theft car insurance is advised for drivers whose cars are not worth too much but would rather pay the insurance excess than the cost of the car if they had to replace it. Third Party Fire and Theft car insurance covers for:
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Injuries to other people including your passengers.
*
Damage to other peoples property/vehicle.
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Theft of your vehicle.
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Damage to your vehicle caused by fire.
Third Party Fire and Theft car insurance does not cover for:
* Damage to your vehicle caused by you.
Fully Comprehensive
This is the most inclusive level of cover and is recommended for drivers whose cars are worth in excess of £3,000. Unlike third party cover, fully comprehensive covers for most issues that occur as a result of an accident or damage to your vehicle. Fully comprehensive car insurance does cost the most but the excess is often less than on third party car insurance and in the event of damage or an accident you will get more financial assistance. Fully Comprehensive car insurance covers for:
* Injuries to other people including your passengers
* Damage to other peoples property/vehicle
* Theft of your vehicle
* Damage caused by fire to your vehicle
* Accidental damage to your vehicle
* Personal accident benefits
* Medical expenses
* Loss of or damage to personal items in vehicle
It is important to remember that not all car insurance policies are the same - all will cover the basics, but different companies will vary what they offer. For example, some may offer car breakdown cover and a courtesy car as standard on their comprehensive policy, while others may charge extra; because of these inconsistencies, it pays to know which type of car insurance you need for your purpose and to shop around for the best deal.
Once you have decided which level of car insurance you want there are a few other things to take into account. Most car insurance providers will charge extra for legal expense cover, depending on your level of insurance, you must decide if this is necessary or not - legal costs can soon add up in the event of an accident. Another optional extra is often protection for your 'no claims bonus', which can prove useful in the event of an accident. Again, some companies add this to car insurance policies as standard but it is important to check.
Finally, most car insurance providers will expect you to pay an excess in the event of a claim. This means that before the car insurance company pay out you must pay the amount set which can vary greatly depending on your age and experience. Because the excess can often be more than the damage caused it is important to take this into account when shopping around for car insurance quotes.
Source:http://www.fairinvestment.co.uk
