Car Insurance Policies Explained

Getting good value from your car insurance is never easy. If you go to the comparison sites, you will be confronted with lots of deals and many of these will be great. However, it’s not easy to tell exactly whether you get what you want.

Policy

You will need to read the policy carefully to see what is included and excluded. Basically, car insurance policies boil down to the following three varieties

Third Party Only (the cheapest)
Third Party Fire and Theft (slightly more expensive)
Comprehensive (more expensive)

However, it’s worth exploring what each means. Third Party Only is the basic policy which meets a legal minimum so you can drive on the road – if you hit someone else, then your insurance costs will pay for your liability. But, if your car is stolen, or has a fire, then you won’t get a penny and you’ll need to pay for the costs yourself. As might be obvious, if you go for Third Party Fire and Theft then at least you are covered in those two extra instances. Finally, in Comprehensive cover, if you crash your car and nobody else is involved, even if it’s your fault, you will be able to claim the costs back from your car insurance company.

All is not rosy in that situation, however, because your premiums will increase as a result of your claim. Aha ! Say the insurance companies, we can even solve that problem for you. We will offer you further insurance (at a bit extra cost) to prevent you losing your no claims bonus in the event of a claim. What a marvellous idea!

No Claims Bonus – no claim in a year, you get a no claims bonus the following year. Probably something like 20%, it increases year on year to a maximum discount usually something like 60%. Again you will need to check the policy wording to find out the exact numbers.