Nobody plans to have an accident, but these things do happen so it is important to ensure that we are all protected adequately. With motor vehicles, the level of protection provided by insurance really depends upon what cover you have selected and which insurance company you are dealing with.
With motor insurance the cover will typically be either Third Party Only or Fully Comprehensive. Everyone assumes that they know the difference, but do you really know the consequences of this choice? Third Party Only – this is the minimum cover required by law. Since Third Party Only just covers the damage and injuries that you may cause to others, you may not claim from your own insurance for the damage to your own car and, if you are to blame, you must pay for your own repairs. However, if you are not to blame for the accident, you are entitled to make a claim and recover directly from the other party’s insurance.
Please note that with Third Party Only, it is not your insurer’s obligation to assist you with this claim against the other party. If you think that you will require assistance in making a claim, there are complementary products available to provide this type of cover. For example, Claims Assistance or Legal Protection, which might or might not be included in your package automatically, depending upon who arranged this.
Fully Comprehensive - the basic difference is that this covers your own damage also, in addition to damage and injuries that you cause to others. If you have an accident and have Fully Comprehensive cover, you may wish to make a claim under your own policy. However, you should be aware that, since this is a claim, you would lose some or all of your No Claims Discount at your next renewal. This applies to claims on your own policy, regardless of whom is to blame for the accident – it is a NO CLAIMS Discount and not a NO BLAME discount.
However, if you do make a claim and lose your discount and then it is shown that you are not to blame, assuming that the other party’s insurance pays up, you should then get the discount re-instated.
SOME HOT ISSUES
Apart from this, there are some issues that you might not be aware of with motor insurance. You should be particularly aware of these when comparing motor quotes. For example, a major variable in motor insurance is the level of excess there is applicable under the policy. The excess is the first part of a claim that you pay yourself. For example, your repairs cost you £1,000 but you have an excess of £300, the insurance will only pay for £700 towards the repairs. The impact of this is to you is obvious, but there is another side to this, which is the effect on the premiums. The higher the excess, the lower the premium will be. So perhaps you should have the excess as high as you can afford so as to reduce the premium. The amount of the premium is important, but bear in mind that there are other considerations like the level of cover and excess, the level of service provided and the efficiency of claims handling.
When buying a car always bear in mind the cost of insuring it. A high value powerful sports car might be a joy to own, but it could cost you an arm and leg to insure. Also bear in mind the age of the drivers, since no insurer will want to include a young driver on a sports car without charging a fair premium for this. Unfortunately, statistically it is younger drivers who have most claims, so motor insurance premiums reflect this.
When you are given a motor quote, look very carefully at what is included – not all motor insurance policies are alike and not all providers give the same level of service. If you do not understand something, ask questions until you are satisfied with the response. Try to find out what others say about the level of service and the claims handling record of the company.
PROTECTING YOUR NO CLAIMS DISCOUNT,
AS MENTIONED ABOVE
When you make a claim from your own motor insurance policy, you lose some of your No Claims Discount at your next renewal.
This is frustrating to say the least. You spend years insuring your car with no claims being made, building up what can be as much as 65% discount on the premium, just to lose it all when you have a claim. Well, do not allow the situation to arise. Protect your No Claims Discount.
Protected No Claims Discount is available as an optional extra on some private car policies from some providers. In a nutshell, the way that this works is that for a small additional premium, you can effectively insure your discount so that in the event of a claim you do not lose it.