Types of Car Insurance CoverThird Party Car InsuranceThird Party car insurance is a legal requirement in the UK. It covers loss or damage to other people and property. If your car is only worth a few hundred pounds, Third Party car insurance may be the most sensible option as other forms of insurance may cost more than the car is worth. However, you should consider additional cover such as Fire and Theft or Legal Protection cover to strengthen the Third Party policy. In law, you are the First Party, your insurance company is referred to as the Second Party and any person with whom (or thing with which) you have an accident is called the Third Party. Therefore if you are involved in an accident with another vehicle they are the Third Party. If you damage a wall which belongs to a local business then the owner of the wall (the business) would be the Third Party.
If you choose to have Third Party Fire and Theft Insurance, you will be covered
for damage to property belonging to and personal injury of Third Parties as well
as Fire and Theft cover for your own car. With Third Party Only car insurance
there is no cover at all for your vehicle.
Fully Comprehensive Car InsuranceFully Comprehensive car insurance provides additional cover to that offered by Third Party Fire and Theft car insurance. The most important differences are that the following are included in a policy: Damage to your car (subject to any excess that may apply), windscreen cover, personal accident cover for yourself and your passengers and personal affects cover, including stereo/audio equipment. You can check exactly what is included when you freephone for a quotation.
Your new car may be bought using a credit agreement or loan. In this case you'd
be advised to purchase Fully Comprehensive car insurance. There are many
stories about people who have to carry on with payments on a car which was
written off or stolen long ago.
Social Domestic & Pleasure Car Insurance
This covers you for daily journeys in your car which are not related to any form
of business use. If you travel to work in your car you must have Social
Domestic and Pleasure including to and from a permanent place of work included
in your policy.
Protected No Claims DiscountIf you were to make a claim against your insurance policy then your entitlement to a no claims discount (NCD) would be reduced at the next renewal date according to the scale in your insurance policy. For example if you were entitled to a maximum NCD and you made a claim the reduction in discount might be from 65% to 40% and it would take a couple of years, without any further claims, to regain the 65% maximum No Claims Discount.
You are able to pay an additional premium in order to protect your No Claims Discount
in the even of a claim, however, if you were to have two claims the protection would be lost.
Car Insurance ExcessThe car insurance excess is the amount that you would have to contribute towards the cost of any claim under the car insurance policy. This may be either compulsory or voluntary. A compulsory excess is one that is a condition of the policy, for example, you may have a windscreen excess of £40 and therefore in the event of a claim would be expected to contribute this amount to the replacement/repair of the windscreen. For some types of car, especially high value or sports cars, there is usually a compulsory excess in respect of accident damage. For young or inexperienced drivers there is often a compulsory excess applied.
A voluntary excess is an excess that you agree to in return for a reduction in
your car insurance premium. Any voluntary excess operates in addition to any
compulsory excess. It can be a good idea to take an excess not only because it
lowers your premium but also because it may not be sensible to make a claim
against your insurance company if the amount was small as you would lose some
or all of your no claims discount.
Uninsured Loss RecoveryIf you are involved in an accident with an uninsured motorist and you have comprehensive insurance your policy will pay for repairs to your car, but you will still have to pay any excess that is applicable. In addition, if you or your passengers were injured then you would have no recourse against the other driver without legal representation.
The Uninsured Loss Recovery option works to seek recompense for the expenses you
have had to pay, the excess, a hire car, perhaps loss of earnings and any
personal injury claims. This saves you the effort of seeking redress from the
Third party directly. Query capitalising third party.
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