Car insurance explained
What Does Car Insurance Cover?
This depends entirely on the level of cover you have taken out, but as an overview, you should expect your insurance to at least cover any damage you cause to someone else’s vehicle or property. Always check your policy documents to understand what you are covered for.
What Levels of Cover Can I Get?
There are three main levels of car insurance policies:
Third Party – The lowest level of cover in car insurance, and will only cover damage you cause to other people, the vehicles they are driving or accidental damage to property such as walls. It’s important to understand that third party cover will not protect your own car, any damage will have to be paid for yourself.
Third Party, Fire & Theft – This is the same level of cover as the third party, with the addition of coverage in the instance your vehicle is stolen, or destruction or damage from fire.
Comprehensive – Also know as “fully comp”, this insurance includes everything from the third party, third party, fire & left and then wider damage to your own vehicle also. Comprehensive car insurance also can include a range of benefits including, but not limited to windscreen and gadgets cover. Some policies will also allow you to drive another persons car or even a hire car, but generally only at a third party level.
Every insurer’s policies are slightly different so research to ensure that you are covered for what you need is essential if you want to avoid any nasty bills later down the line.
What is Car Insurance Excess?
Excess on a policy is what you pay in the event of the claim. A common misconception is that in the event of a claim, you have to literally hand over money to your insurance company when this isn’t the case. Your excess is simply removed from the money given to you once the claim has been successful. For example, if your claim is for £2000 and your excess is £250, the insurance company will pay out £1750.
There are two types of excess on car insurance policies:
Compulsory – this excess amount is set by your insurer as a part of your policy. The amount can vary with factors such as age, car and type of claim you are making. The compulsory excess amount will always be paid in the event of a claim.
Voluntary – this excess amount is set by you, and added to the compulsory excess noted previously. The higher your voluntary excess, the lower your insurance premium is likely to be. This is because the higher the excess, the less your insurer will pay out in the event of a claim. You are essentially taking on some of the risks, so if you know you’re a safe driver and are not likely to cause an accident or damage, this is a good way of getting your insurance premiums down.
What is Excess Protection?
This is a secondary insurance which will cover the cost of your excess in the event of making a claim. If you set a high voluntary excess to bring insurance premiums down, this is a good way of reclaiming that cost which won’t be paid out. However this is an additional premium, and the cost should be offset against the saving to ensure its financially beneficial.
The downside is that you will have to make two claims, one for your car insurance, and other for the excess insurance.
What Else Should I Know?
The single most important aspect of any insurance, not just limited to vehicles is making sure that you understand what you are covered for. Always take the time to read your policy documents and small print, this will help you avoid claiming for anything you were not covered for and prevent those unexpected surprises.
At Call Wiser we specialise in finding our customers the best deal on car insurance by comparing products from a panel of over 30 lenders. Keeping that personal touch, you can call us and speak to someone, explain your needs and they’ll work with you to ensure you are covered at the level you need. No confusing forms, no jargon, a real person at the end of a telephone, doing all the hard work with you.