Car insurance Policies
Car insurance protects drivers against financial losses. Different policies offer varying protection, the most basic of which are the third-party policies, which cover the cost of damages caused to other drivers in the event of an accident in which the policyholder is at fault. Car insurance is therefore essential; it is also illegal to drive without insurance throughout the European Union.
Car insurers tailor, to some degree, their policies for each individual driver. When searching for a car insurance policy, therefore, insurers will ask drivers to decide between various options. The addition and omission of options will influence the cost of your car insurance policy. If money is an issue, it is worth juggling these various options in order to receive the most competitive car insurance quote for your specific requirements. Never lie on your policy, because in most cases this will invalidate any claim and may even be illegal.
Here we consider some of the options you may be able to select within your policy, and how they affect the cost of your insurance:
- Voluntary excess: The policyholder will pay this money towards the total amount of a claim. Normally insurers remove this from the claim amount, e.g., if you have an excess of £300, and your insurers settle a claim at £3000, you will actually receive £2700. The higher your voluntary excess, the lower your insurance premium.
- Monthly or annual repayments: some people find it difficult to find a lump sum to cover the cost of car insurance in one go, in this case some insurers will allow you to spread the cost of your car insurance over several months. Paying your premium annually is cheaper, as insurance charge interest on monthly repayment plans – they are effectively loans.
- Personal Injury Protection: this covers the cost of medical treatment and time off work in the event of an accident. Choosing this option will increase the cost of the policy, but does afford peace of mind.
- Uninsured Coverage: this protects drivers from financial losses incurred if an uninsured driver hits them. This option also increases the cost of the policy. However, with a rise in the number of people driving without insurance, it a benefit well worth having.
