What Is Car Insurance?
Find out more about Car insurance and what it covers.
What Is Car Insurance And What Does It Cover?
Car Insurance provides, at the basic level of Third Party Only, cover for damage or injury caused by your vehicle. Other levels of cover are available, such as Third Party, Fire & Theft, and Comprehensive cover, which offer varying degrees of protection for you, your passengers and your vehicle, but will come with a higher premium. Car Insurance is required by law, and you must have at least a Third Party Only policy or you will face criminal charges if caught.
Car Insurance Explained
A Car Insurance Policy will provide financial protection if your vehicle were to be involved in an accident. There are three types of cover, each with a different level of protection. Third Party Only will cover you for claims made by third parties for damage to their vehicle and/or injury. Third Party, Fire & Theft will cover all third parties (as above), plus your own vehicle if it gets stolen or damaged by fire. Finally there is Comprehensive cover, which protects you from all of the above and any damages to your own vehicle. The level of cover is normally reflected in the price of the premium; typically, the more protection you have, the higher the premium and vice versa.
You may also wish to add Breakdown Cover to your policy. No one wants the inconvenience of breaking down, so it makes complete sense to have it in place just in case the unfortunate should occur. You may also be able to have a courtesy car whilst yours is off the road. Having valid car insurance is required by law.
If you are caught driving a vehicle that you are not insured to drive then the police can issue you with a £300 fixed penalty and 6 points on your licence. If your case then goes to court, you could be facing an unlimited fine and being disqualified from driving. It is worth noting that the police have the power to seize and even destroy the uninsured vehicle.
Many factors will affect the price of your premium. As a general rule, you can accumulate no claims bonus. The more years that you drive without having to make a claim, the higher the discount you will receive – normally the bonus is served with a maximum of 5 years. On the other hand, driving offences and accidents that were your fault will increase the price of your premium. In extreme cases, this could result in you having to pay thousands of pounds for insurance or even not being able to get insurance at all. Only the car that you own can be insured by you; you cannot take out a policy against someone else’s vehicle but you can be added as a named driver.
So what are the basics of car insurance?
- Comprehensive Cover
- Third Party, Fire & Theft Cover
- Third Party Only Cover
- Breakdown Assistance Cover
- Cover is Required By Law