By law you must be insured to drive a car. Driving a car without insurance can earn you a £300 fine and 6 penalty points added to your licence from the police. The courts can also give you an unlimited fine if the case goes that far.
Car insurance policies are renewed each year and your annual payment may increase or decrease depending on whether you have made any claims.
Choosing a Car Insurance Provider
When you are choosing which provider to use there are several factors you should take into consideration:
- Type of Insurance. There are different types of car insurance you can have and I will discuss these in more detail in the next section.
- Cost. Ask around to see which company offers the best deal.
- Added extras. Some insurance companies may offer extras such as a free courtesy car if your car needs to be repaired, legal costs included, cover for personal belongings damaged during an accident or cover when driving abroad.
- Customer Satisfaction. What do other customers say about this insurance policy? Do they have a good reputation? Have any of your family or friends used them and what do they say?
Types of Insurance
Third Party
This will cover any damage caused to another person’s car as a result of your driving however will not cover the cost of any repairs to your car.
Third Party, Fire and Theft
As well as covering damage caused to another person’s vehicle, it will also cover the cost if your car is stolen or catches fire. However, any damage to your own car will be your own responsibility.
Fully Comprehensive
This is the highest level of cover available and includes the cost of damage to your own vehicle as well as everything covered by third party, fire and theft insurance.
Multi-car Insurance
Families with several cars may consider a multi-car insurance deal. This is when several cars are insured with the same insurance company under a single policy. However, each car will have its own cover so a claim against one car will not affect the others.
Cost of Insurance
You can pay your car insurance annually or on a monthly basis. Alongside your car insurance payment, you will also have what is called an excess. This is a fixed amount of money you will need to pay towards repairing your car when making a claim.
The cost of your insurance will be effected by a number of factors including:
- The length of time you have been driving
- Whether you have any points on your licence or if you have committed any driving offences
- The levels of car-related crime in your area
- If there is a police station nearby. Statistics show that fewer crimes are committed in the vicinity of a police station
- Where the car will be kept. Keeping your car parked on a driveway or better still in a garage will bring the cost down whereas keeping your car parked on the street outside your house will likely increase it
Reducing the cost of your car insurance
There are some ways you can reduce the cost of your insurance
- Take part in the pass plus scheme
- Install a dash cam
- Have an experienced driver named on your policy (this means that although they are not the main driver they can still drive the car as well). If you do this make sure this person actually does drive the car from time to time. Insurance companies do not allow you to appoint a named driver if they are never going to drive the car.
- Add a black box on to your policy (more on this later)
Black box insurance policy
Also known as ‘telematics’ insurance, a black box insurance uses technology to monitor your driving. A small black box containing a GPS tracker is attached to your car which tracks your car and monitors the quality of your driving.
Your insurance company will gather data on when and where you drive, your speed, how you drive i.e breaking and acceleration and how often you drive. Most insurance companies will score your driving which you can view either on their website or on a mobile app. This allows you to see any areas of driving you need to improve.
Once your insurance policy is due for renewal, all of the information gathered will be analysed and if you have proven that you are a safe and sensible driver they will reduce the cost of your insurance for the following year. Some companies may also offer a discount after a few months.
Does a black box policy have a curfew?
A common belief about having a black box installed is you cannot drive after a certain time at night. Whilst most black box policies do not impose a curfew, if you make a habit of driving late at night it may affect your overall driving score. This is because statistically most car accidents happen at night time.
