17/10/2009
Some basic elements of car insurance are quite straightforward - to begin with it is a legal requirement that you have insurance in place for a vehicle if you plan to drive it on UK roads. Furthermore policies typically involve a premium and an excess, an initial amount you have to pay before the insurance itself kicks in following a claim. But beyond this there are one or two further details which may be of use if you're shopping around for effective cover at the right price.
There are a number of variations of car insurance, operating at three different levels. Firstly there is third party which only pays out for damage and injury caused by you as the driver to other people and to their car.
Second up the chain is third party, fire and theft, which does the same thing as third party only but, as the name suggests, also pays out if the car is stolen or if it is wrecked by a fire, or if it is damaged by fire, which can happen due to something as simple as an engine fault.
At the top of the list of levels is comprehensive insurance, often called 'fully comp'. This does everything that the previous level of third party fire and theft does but also covers for the repair of damage done to your car after a crash or incident.
Third party may seem a rather extreme and stripped down version of cover but it may be useful for people who drive a car of a very low value, perhaps only worth a few hundred pounds.
Once you have your insurance in place it may be worth taking time out to understand how the no claims discount or 'NCD' works. This is essentially a cut in price which insurers allow you on your premium if you do not make any claims on your policy.
The amount of no claims discount you get often depends on the kind of company you are insured with. Normally the longer you have been driving for, the higher amount of no claims bonus you may get if you have not had an accident.
Furthermore it is possible to protect the no claims bonus you have built up by paying a further fee for no claims discount protection. This may mean you need to pay a percentage of the premium to safeguard the discount and normally this may mean if you only make a single claim a year it has no effect on your 'NCD'.
Car insurance may also come with other extras, such as low-price roadside assistance and recovery. It may help to compare the cost of protection and any extras quickly with an online motoring specialist, possibly saving time and money.