Coverage depends upon the type of policy you choose. A minimum of third party insurance is required by law and, subject to the type of insurance you choose, your policy will reimburse you if your car is stolen, damaged or has suffered fire damage.
Although we know it is a requirement under law to have car insurance, how much
cover and what type you buy is entirely up to you.
There are three main common types of car insurance available:
- Third-party: covers damage to other vehicles, damage to property and injury
to other people. This doesn't cover damage to your own car or any injuries
you may suffer in a car accident.
- Third-party, fire and theft: provides the same cover as third-party, but with
the extra protection if your car is stolen or catches fire.
- Fully comprehensive: provides the same cover as third-party, fire and theft
but also covers damage to your own car, even if the damage was caused by
you. Fully comprehensive cover often includes protection for windscreen damage
An excess in car insurance terms is an amount that you are required to pay towards
any claim you make, so the process can go ahead. For example, if your claim
is for £2,000 but your excess is £400, you would have to pay the first £400
and your insurer pays the remaining £1,600.
It's worth bearing in mind that excess comes in two types:
- Compulsory - a sum that is fixed by the insurer and cannot be changed.
- Voluntary - a sum that is agreed between the driver and insurer.
The cost depends on a range of factors. When providing a quote, insurers will look at various aspects such as your postcode, annual mileage, the make and model of your car, as well as the amount of time you've been driving and any accident history. Once insurers have this information, they can make an informed decision and provide you with a quote.