Motor Insurance Advice

If you are a driver or owner of a car, motorbike, lorry or any other type of motor vehicle, you must be insured by law.

In order to drive a motor vehicle you require a valid driving licence. The paper part of the licence runs until you are 70 years of age. The photo card part of the licence is subject to renewal every 10 years. If you fail to renew the photo card part of the licence, you are still entitled to drive but you may be committing an offence and may face a fine of up to £1,000

The world of motor insurance is a complex one. There are literally hundreds of different policies to choose from, and it’s not always easy to know how to go about finding the right one for you – and at a cost that won’t break the bank!

Here we aim to explain some of the ins and outs of motor insurance, and the advantages of obtaining impartial and expert advice. Also, what you should do if you’re involved in an accident.

Third Party, Fire And Theft

The minimum insurance cover you can buy is called ‘third party only’. This covers you if you injure someone else or damage their property. However, very few companies will sell you this cover on its own.

The next step up includes ‘fire and theft’, and this provides protection against loss and damage if your vehicle is burnt or stolen. However it will not protect you against damage to your vehicle if you’re involved in an accident, or if it is vandalised.

Comprehensive Insurance

Comprehensive insurance covers damage to your vehicle from a wide range of causes, including accidents and fire and theft. Other benefits sometimes include limited cover for items stolen from your vehicle, medical expenses and personal accident protection.

The word ‘comprehensive’ can be misleading however, as these policies always include limitations and exclusions.

Uninsured Loss Recovery (ULR)

This provides the policyholder with cover for legal expense costs to pay for a solicitor to pursue a guilty third party in order to recover your uninsured losses – policy excess, hire car charge, any other out of pocket expenses caused by the third party negligence – as well as costs to pursue a personal injury claim. ULR often provides cover for free 24 hr legal advice of a personal nature.

It is especially useful for Third Party Fire & Theft policyholders and will attempt to recover not only the losses mentioned above, but also their vehicle damage costs (from a negligent third party.)

Motorist’s Legal Protection

This is cover to meet the cost of defending court actions arising from incidents on the road. It includes a free 24 hour expert advisory service.

How much will it cost?

The cost of motor insurance can vary enormously – an insurance broker who knows the market will be able to select the best policy for you. However, many factors will influence the premium you have to pay.

  • The type of vehicle you drive.  The more powerful the engine, the more expensive the car is to repair, and the more likely it is to be broken into or stolen will all affect the premium you have to pay.
  • The area you live in, your occupation and where your car is parked. If you live in an inner city where you are more likely to be involved in an accident or have your car stolen, you will pay more than someone who lives in a country village. The same is true if you use your car for work . Whether or not your car is kept in a garage can also make a difference. Including cover for drivers under the age of 25 will also affect the premium – costs can be kept lower by restricting the drivers to you, or you and your legal partner only.
  • Your age and driving experience. Young drivers are more likely to have accidents, while older people tend to be more careful. Insurers generally apply a basic rate to drivers aged 30-49. If you’re younger than this, your premium is likely to be higher due to the higher risk posed. If you’re older, you could qualify for a discount. Any disabilities you have will also be taken into account.
  • If you’ve been convicted of motoring offences in the past, or have a bad accident record, you will probably have to pay a higher premium.
  • Before an insurance company will sell you motor insurance it will want to weigh up all the risks involved, so before your broker can offer you an accurate quotation they will have to ask a lot of detailed questions covering the points outlined above. Remember – if you fail to provide accurate information a subsequent claim may be refused.
  • It’s worth consulting a broker who has a wide knowledge of what’s available and will shop around, saving you considerable time in having to seek quotations from different insurers.

Cutting the Cost

You may be able to reduce the premium you pay by restricting the cover granted by the policy. For example – you could limit the number of people who will drive the vehicle. But be careful – if the regular driver is incapacitated, you don’t want to find out that nobody can drive the car in an emergency.

Another way of cutting your insurance costs is to agree to pay the first part of any claim. This is known as an ‘excess’ and discounts are available for taking out an additional voluntary excess (e.g. £100) but beware that compulsory excesses may already apply. Young drivers may be able to obtain an initial discount on their first year’s policy if they have successfully sat the “Pass Plus” course

No Claim Bonus

Once you’ve had motor insurance for a year or more without making a claim, you should be eligible for a ‘no claim discount’ or ‘no claim bonus.’ This usually amounts to a reduction of 30% on your premium in the first year, rising in annual steps to a maximum of 60 or 65%.

If you make a claim, your no claim bonus will be reduced or disallowed. If you have built up a higher rate of bonus, most insurers will usually reduce it by two years, rather than disallowing it altogether, and some offer a protected no claim bonus. Sometimes it may be cheaper to pay for minor damage yourself, rather than risk losing your bonus.

But what if the accident was not your fault? If you have protected or guaranteed your ‘no claim bonus’ this should be preserved following an incident, however if it is not protected it will be stepped back until the claim is resolved and a recovery made in full from the guilty third party. Your no claim bonus shouldn’t be affected if the insurer is able to recover the cost of the claim from the party who was to blame.

It’s important that you inform your broker of all incidents of damage or loss, however small, and even if you do not make a claim for them. There have been cases where insurance companies have refused to meet claims because the driver failed to disclose previous incidents.

Insuring your car abroad

Your UK policy will provide cover in EU countries to meet their minimum legal requirements, but this may not be enough if you have an accident. Nor will it cover you for theft or damage to your car, and may not cover your legal liabilities to other people. Some insurers will ask you to pay an additional premium for comprehensive cover whereas others give it at no cost. If you are a regular traveller to the continent check with your broker who will select the most appropriate choice for you. You may need to advise your insurer of any overseas trip.

If you don’t tell your insurer and have an accident, you may find yourself paying for the extra costs that would have been incurred had the accident happened in this country, provided the insurer agrees to deal with the claim.

When you start your policy ask your broker if you have an EU certificate and if it is necessary to tell them about journeys less than 30 days to Europe.

If you do not have a EU certificate, or are travelling outside Europe you will need to give your broker plenty of notice that you wish to order a green card. This will provide the necessary evidence that your policy meets the legal requirements for third party liability in the country you are visiting.

However always ensure that if you do travel outside the UK your insurance policy will extend the same cover to Europe. Some policies will only give the minimum legal requirement in the country visited which will not necessarily be the same as the cover you have in the UK and in this scenario will certainly not provide cover for loss or damage to your vehicle.

If you are involved in an accident

If you have a vehicle accident which causes injury or damage, you must give your name and address, and details of your insurance policy to anyone who reasonably needs it.

  • If you’re involved in an accident, do not admit liability. Take the name and address of the other driver, and details of their insurance company, and of any witnesses. If anyone is injured, call the police. If they do not attend the scene, or if someone else’s property has been damaged, the accident must be reported to the police within 24 hours.
  • You must tell your insurance company about the accident, even if you do not intend making a claim, as you will always need to report and incident. Your broker can advise you about whether you should make a claim or not.
  • If you intend to claim, you’ll have to contact your broker. You should wait for the go-ahead from your insurance company before having your vehicle repaired. They may want a damage assessor to look at it, or you may have to supply estimates before the work is done. Some insurers may have their own repair schemes, where you can take the vehicle to garages which may be able to start repairs immediately.
  • If you have to pay a proportion of the repair costs, then you must pay this to the repairer irrespective of who was to blame for the accident. Should you decide to go ahead with the repair yourself, you are responsible for the cost until your insurers have agreed to pay. But beware of taking this course of action, because if the insurer can show repairs could have been done cheaper somewhere else, they may pay a lesser amount than you claim.
  • If your vehicle is not worth repairing, the insurance company will offer you a lump sum for it. This is known as a ‘write-off’ or ‘total-loss’. The damaged vehicle then belongs to them.
  • After an accident, you may incur expenses which are not covered by your policy – examples are the cost of hiring a car while yours is repaired, or compensation for personal injury. Such expenses might be claimed against a third party – again, your broker will be able to give you all the advice you need.

If your vehicle is stolen

If your vehicle is stolen, you must inform the police immediately. You should also tell your insurance broker as quickly as possible.

You may have to wait up to six weeks with some insurers before they will settle any claim for its loss. This time is to allow the police to investigate the crime, and hopefully recover the vehicle, however many insurers operate shorter timescales.

If your vehicle is found, tell your insurance company and give them precise details of its whereabouts.

Personal property stolen from a vehicle or damaged may be covered under a comprehensive policy, but only up to a certain limit – usually around £150.

Where to go for advice

The world of motor insurance is extremely complex, so always talk to an insurance broker. As an independent expert, they will help you decide what sort of cover you need, and choose the right insurer to meet your requirements at the most reasonable cost.

An insurance broker will put your interests first. They work for you, not the insurance company. So you can be sure of impartial advice at all times, a choice of the products available, and a helping hand.

BIBA – the British Insurance Brokers’ Association – is the largest trade association for insurance brokers. All BIBA members offer the highest professional standards and financial integrity, and always place the interests of their clients first and are registered by the Financial Services Authority.

BIBA members can be found nationwide, so there’s bound to be one near you.

Your Accident Checklist

Print out this checklist and keep it in your car in case you have an accident.
If you are involved in an accident, do not admit liability