Car Insurance Guidance

It depends on the type of policy you have, but car insurance typically covers your vehicle, the damage that you might cause to other vehicles, to the property of other drivers and to other motorists generally. However, car insurance can include, or can be extended to include, cover for a host of different items, including personal belongings, medical expenses and breakdown assistance.

There are three main types of car insurance policy: 

Third party Third party is the lowest level of cover, protecting you against damage that's caused by you or one of your passengers to others. That includes damage to other drivers and their vehicles as well as accidental damage to lampposts and walls. Third party does not cover your own car – you'll have to foot the bill for any damage yourself. 

Third party, fire and theft Third party, fire and theft covers everything included in third party cover, but it will also pay to repair or replace your car if it's stolen or damaged/destroyed by fire. 

Comprehensive car insurance Comprehensive car insurance is the widest level of coverage available, including third party and third party, fire and theft, but also covering wider damage to your own vehicle. 

Some policies will also cover you to drive the cars of others – and sometimes hire cars – but usually only up to third party level

Insurers set the amount you'll pay based on a number of factors, including your record as a driver, your personal circumstances and your car itself. For example, if you're an older driver with years of experience, living in a relatively safe area and driving a sensible car, your premium will be relatively cheap. However, if you're a young, inexperienced driver with a high-performance car, the cost of your cover will be much higher.

Sometimes a higher litre car may not be more expensive to insure than a smaller litre engine, in fact sometimes it can be the reverse!!  Insurance companies look at many aspects of a car for insurance costs.

An excess is the amount you pay towards any claim you make on your car insurance policy. For example, if you have a claim worth £500, and you have a £100 excess, you'll only receive £400 from your provider. Most car insurers have two types of excess. A compulsory excess, which they set and can't be modified, and a voluntary excess, which you can set yourself. Remember to set your voluntary excess carefully, if you're willing to contribute a large amount towards a claim your insurer will reward you with a lower premium but this could make claiming on your policy very expensive.

When you drive your own car in the EU, your insurer will automatically provide cover to meet the minimum legal requirements of the country you're driving in (don’t forget to check the small print for any exclusions on your policy). But this is rarely more generous than basic third-party insurance. If you have comprehensive cover your insurer may extend your policy for a limited time overseas at the same level. This 'free' allowance period can vary between insurers from a long weekend to a whole year's worth - although 60 to 90 days is fairly common. Once the period elapses, your cover reverts to the basic legal level. Some insurers allow you to extend the allowance period. You can do this when you take out the policy - typically at a price of around £20. Alternatively, you can contact your insurer after buying the policy to request an extension.  

Please be aware things may change after 1st January 2021.

A no-claims bonuses is a discount car insurers offer you if you can stay claim free for an extended period of time. Depending on which insurer you are with, every year you go without a claim will lead to a larger discount. Your no-claims bonuses will be cut if you make a claim - but the size of that cut varies between insurers. Insurers also have different policies on whether a claim that isn’t your fault will affect your bonus. You can limit the impact of claims on your bonus by paying extra to 'protect' it. With 'no-claims bonus protection', a set number of claims will be exempted from affecting your discount. A maximum of two or three claims over a three year period is common.   Protection shields you from losing discount as a result of a claim - but the insurer can still raise the premium to which that discount is applied. This means that while you will be saving some money, protection is no guarantee that the premium you pay won't go up if you claim.

Some comprehensive policies will allow you to drive the cars of your friends and family and may also allow you to drive hire cars, too – although, this is usually only up to the level of third party coverage. You can also add other drivers to your policy, known as 'named drivers', so they're also covered to use your car.