Car Insurance Explained | What You Need To Know (With Insurance Expert)

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I’m Insurance Expert, here to talk to you about the glamorous world of car insurance. OK, I totally get you could probably think of 100 other ways to spend an afternoon than shopping for car insurance. But it’s an essential job for anyone that owns a car. There are three main types of coverage for car insurance in the UK: third-party, third-party fire, and theft, and comprehensive. In this video, I’ll give you a rundown of what each cover includes, a quick lesson on access, and some extra cover options that might suit your specific driving style.

Third Party Car Insurance

Car Insurance Explained | What You Need To Know (With Insurance Expert)

Third-party cover is the minimum legal requirement for drivers in the UK. If you gotta a car, you gotta have it. Unsurprisingly, then, the third party is the most basic form of cover. If you were to get into an accident, this type of cover will protect you against injuries to others, both in your car and other vehicles, as well as any legal claims made against you. However, it will only protect you against damages to someone else’s car or property, not your own. A popular choice among first-time drivers and those on a budget, be aware that third-party cover also doesn’t protect you if your car is stolen or destroyed by fire. Which would be an absolute nightmare of a day!

Third-Party, Fire, And Theft

Car Insurance Explained | What You Need To Know (With Insurance Expert)

Third-party, fire, and theft are the second tier of car insurance. It works much like the third-party cover but, you guessed it, also includes cover for stolen vehicles and fire damage. However, it still doesn’t cover you for damages to your own car, if you were to get injured or if your car is written off entirely. So, if you were to get into an accident, you could still end up forking out a lot of money to cover your own costs.

Comprehensive Cover

Car Insurance Explained | What You Need To Know (With Insurance Expert)

When it comes to comprehensive cover, kudos to the marketing department for thinking of a dynamic, cutting-edge name for this top tier of car insurance. Not all heroes wear capes, but some should have given the naming round-table just a couple more minutes! To be fair, the comprehensive cover does what it says on the tin, covering you against fire and theft, personal injuries and injuries to people in your car and other vehicles, damages to both your car, other vehicles, and property, plus the cost of any legal claims. With comprehensive cover, you can get in as many accidents as you want.KIDDING!

PAYG vs Temporary Cover

Car Insurance Explained | What You Need To Know (With Insurance Expert)

As well as the “big three” you may also have heard of pay-as-you-go and temporary car insurance. And while they sound similar they are actually quite different forms of cover. Pay-as-you-go is strictly usage-based, so you only pay for the miles you drive. This type of cover is ideal for people who regularly use their car but only for low-mileage journeys, such as the school run or trips to the supermarket. Despite the name, pay-as-you-go insurance still protects your car even when you’re not driving it. It is just that the cost of your premiums is calculated based on your mileage.

  • This can be done in one of three ways:
  1. By tracking your miles. This usually involves fitting your car with a small device, similar to a black box, that tracks your distance.
  2. By hourly rate. Again, use a device to track your hours spent in the car. The downsides to this method include having to pay extra for getting stuck in traffic and incidentally incentivizing people to drive faster.
  3. The final method is to estimate your miles. This is ideal for people who regularly drive the same journey and know the exact distances. Otherwise, you could get stung if you overestimate your miles as many insurers won’t offer refunds for unused miles. Temporary cover, then, is purely time-based. It allows you to instantly insure a car from one hour to 30 days at pop and usually acts as a top-up to a pre-existing permanent policy. For example, you have a car that you pay a yearly premium on. But if your brother comes to stay for the week, you would add seven days’ worth of temporary cover so he’s also insured during his visit. Temporary car insurance doesn’t take usage into account, so whether your brother uses the car once, 17 times, or not at all, you still pay the same amount. The type of coverage you will need will depend on how much control you want over your premiums, how often and how far you drive, and whether you’re the sole driver of the car. For more information on whether you need temporary or pay-as-you-go insurance head to– the link to our comparison page is in the description below.

What is excess?

Car Insurance Explained | What You Need To Know (With Insurance Expert)

There are two main costs involved with car insurance. The first is the cost of your coverage. This is your insurance premium and is calculated based on your personal circumstances, the type of car you drive, and your driving track record. The second is your excess. Your excess is a pre-set amount you have to contribute towards any claim made on your policy. So, if you’ve just crashed your brand new Bentley and your excess is £200 but the claims £1000 you’ll have to stump up the 200 quid before the insurance company pays out the additional £800. Most insurers will have a minimum compulsory excess amount and, typically, will let you raise your excess amount to lower your premium. Just make sure you have the budget to account for those out-of-pocket payments. Bentley’s ain’t cheap, honey!

Optional extras

Car Insurance Explained | What You Need To Know (With Insurance Expert)

Even if you have comprehensive coverage, you can still add extra levels of coverage to your policy. So if you’re someone who’s always getting into accidents… well, you probably shouldn’t be on the road. But if you think you’d benefit from a more customized cover, then it might be worth adding some of these optional extras to your car insurance. Lots of these are fairly self-explanatory. When deciding if you need any extra cover, it helps to consider not only what kind of driver you are, but where you typically drive and what you use your car for. For example, if your car is essential to get to work or drop the kids off at school, a courtesy car or car hire cover could be helpful to make sure you’re never stuck without a set of wheels. As a former country gal, I can vouch for windscreen cover if you’re driving down a lot of gravel tracks or country roads. Acorns might look all cute and rustic, but they can do some serious damage. And don’t even get me started on conkers! With personal accident cover, you and your partner are covered should you suffer a serious injury as a result of a car accident. With this cover, your insurer would pay to help out with medical treatments, lost income, and recovery costs. Protected no claims means you can still keep your no-claims bonus even if you make a claim. However, to purchase this you’d normally need to have about three or four years of no claims.

What Next?

Car Insurance Explained | What You Need To Know (With Insurance Expert)

Shopping for car insurance is one of those thankless tasks all car owners have to do. There are loads of providers out there and choosing the right one for you will largely depend on personal circumstances. So, for more information check this Insurence Article/Post.

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