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Car insurance exists to protect you financially in the event of an accident, whether or not it is your fault. It is a mandatory and necessary expense if you own or drive a motor vehicle. You need a good car insurance policy for the financial protection it will afford you in the event of an automobile accident.

Sadly not all insurances include fixing the damages to your car, protecting against liability, legal fees or damage to any other property involved in the accident. Bolt-on niche insurance products such as inconvenience cover, gap insurance and even legal protection insurance can prove to be invaluable additions to your comprehensive car insurance to ensure an accident does not end up costing you more than you can afford should the worst happen.

Choosing the right car insurance will protect not only you, but your vehicle, and third parties in the long run. If you plan to drive, you must be able to prove that you have purchased car insurance. Your level of protection will depend on the type of car insurance policy you choose to take out.

WHY YOU SHOULD SHOP AROUND FOR NEW CAR INSURANCE

Shopping around for car insurance is very important for several reasons:

• You may find better quotes
• Effects of car depreciation
• Your personal circumstances may be different
• Financing could place your car in a greater risk banding
• You may be able to cover the loss of personal goods
• You may find a policy which includes breakdown cover
• You may find an insurer offering inclusive legal cover
• You may find an insurer covering your second car
• You may be offered an introductory discount

Just because you have used the same insurance company or insurance broker for several years, does not mean you are getting the best deal. It doesn't always follow that the same company or broker can offer you the best deal for your insurance.

If your broker manages your entire insurance portfolio then he is in the best position to get you the best deal, as he already has information about your demands and needs. They may be able to consolidate those demands and needs into a package which often will only be available via a broker.

Car depreciation is a direct result of a vehicle’s age and usage. Your new car begins to depreciate as soon as you put the first few miles on the clock. Every year that you own the same car, its value decreases. You should insure accordingly by getting the same coverage at a lower price. This is logical but often people can overlook the obvious. So always ask your broker to check the value of your car against its blue book value, rather than the purchase price. This is because even fully comprehensive policies will only cover a vehicle to its blue book value rather than it's purchase price. So make sure that that is what you declare the car’s value to be. It will usually cost more to insure a more expensive car. You may be lucky enough to find a policy which offers to replace your car with the same of similar following an accident, but this is not usually the case. There is however an insurance product called Vehicle Replacement Insurance which does just that! To find out more about how Vehicle Replacement Insurance works click on the link.

At the time of your last renewal your circumstances may have been different. You may have switched jobs and not drive as many miles per year or have paved the front lawn and turned it into off-street parking. Change your insurance details to reflect these changes in circumstance. Lower mileage drivers can get significant discounts from insurance companiesAdding additional drivers is not as expensive as you would think; a great tip here is to wait until renewal time if possible. Insurers may charge you an administration cost for adding additional drivers, but if you wait until it's time to renew you may not incur this fee.

SO WHICH IS THE BEST CHOICE OF CAR INSURANCE COVER?

There are three types of vehicle insurance in the UK.

1. In many countries including the UK, Third Party Insurance is mandatory. It provides coverage to any third party involved in an accident with the insured vehicle including passengers. Third Party Insurance acts as security against liabilities for damage to another person in a vehicle accident. This does not cover any damage to the vehicle or the driver of the vehicle. Third party insurance will not cover any necessary repairs made to your car.
2. Third Party, Fire and Theft Insurance will cover the benefits of third party insurance and includes any financial loss to the insured vehicle caused by fire or theft. If your car has a low market value, you may find this to be the best type of vehicle insurance. You must have a fully comprehensive policy for a leased or financed car.
3. "Fully Comp" will give you the widest insurance cover for your vehicle.Damage to your car, and personal injury caused by an accident, as well as the basics of third party, fire and theft, are covered by a comprehensive car insurance policy. If your car is worth more than you could afford to replace it, then you should opt for a fully comprehensive insurance policy. There are specialised insurance products like Finance Gap or Vehicle Replacement Gap which can top up the gap between what your insurance company will pay out and the cost of getting a new car – you can find out more online by doing a simple search.
Many factors affect car insurance and most insurance companies offer a range of secondary covers to meet the varied and specialized needs of the policyholder.

FACTORS AFFECTING CAR INSURANCE

1. The Policyholder

• Age of the policyholder
• Men are considered higher risk than ladies
• Your marital status
• As a policy holder your address affects your premium
• The size of the car and engine
• How much your car will cost to replace
• Any modifications that have been made to the vehicle by its owner

A younger less experienced driver will pay a higher insurance premium than someone with several years driving experience.

A married personis considered more responsible for their actions than a person is with no commitments. It stands to reason that a married man with children has more responsibilities and the insurance companies will therefore consider this person a lower risk than a single male in his early twenties driving a WRX.

Where a person lives also affects the insurance cost. Motorists living in rural locations and in areas with a low crime rate are more likely to get a lower insurance premium than those living in cities.

A powerful car is more likely to lose control at the hands of younger drivers: expensive cars cost a lot to replace if scrapped and should they simply require repairs the sum of the replacement parts often costs more than the used car’s value, making more powerful cars very expensive to ensure.

Modifications are more likely to alter the vehicles safety; performance is improved, and handling may be compromised making the vehicle more unpredictable. These factors translate to increased risk for insurance purposes, and premiums will increase as a result.

2. Driver History

• Years of driving experience
• Historical claims
• Any convictions for driving offences
• Annual mileage

The number of years a person has been driving suggests their understanding of the rules of the road, shows the driver has built up experience of driving under varied driving conditions and has attained a certain level of confidence while behind the wheel. Insurance companies base these assumptions on the policyholder's claims history over the last five years. Driving convictions such as speeding, hazardous driving or driving while intoxicated will affect the premium. Parking violations are not included.

Annual mileage is a factor too. Your chances of being involved in an accident are increased the more time your car spends on the road.

3. Vehicle History

• Current vehicle value
• Owned, leased or financed
• Car make and model
• Engine size and performance
• Modifications to the vehicle

If the vehicle has a low book value, it may not seem to be cost effective to pay for comprehensive insurance; however this is not necessarily the case. A named driver with several years of insurance cover and no claims against his or her name could find that fully comprehensive car insurance costs almost the same as a lesser level of cover, but with additional benefits such as a free courtesy car etc. Additional benefits to your policy can often be added at little extra cost when buying online. If you are leasing a vehicle or have acquired it via a finance company, then you will need to provide fully comprehensive insurance for the vehicle. The leasing or finance company will require reimbursement from the policyholder for damage to the car. This will be covered if you have fully comprehensive insurance.

There may be other benefits included in your car insurance policy, which are not always necessary but sometimes advisable:

• Breakdown insurance
• A courtesy car could be offered while yours is being repaired
• Roadside and/or breakdown insurance cover
• Legal cover
• Windscreen replacement
• No Claims protection
• Compulsory or voluntary deductible amount

Choosing the correct insurance and getting the best quote can be daunting as there are so many variables to consider. The right car insurance price is easy to find when you're on a great website. An insurance aggregator website is a good place to get you started. Aggregator websites are easy to use. You'll only need to fill out one questionnaire so that the market can be searched on your behalf. After the site has collected the quotes, you can then compare different policies, as well as being able to save your quote, amend your requirements if necessary and if you are happy you can then buy online. Think about first giving your current broker a call and asking them to get you a better deal based on your findings. The most important factor about buying online is that you compare like for like quotes. It could be more complicated than you at first think. Good luck.

Tags: auto insurance, car depreciation, car insurance, gap insurance, motor insurance, vehicle replacement insurance