How to arrange insurance for your newly bought car
It’s essential to arrange insurance on any car you have bought before you drive it for the first time. Fortunately, this is a quick and simple process that can be done over the phone with any major provider. However, before you commit to a car insurance policy, make sure that you understand the different levels of cover that are available, along with any relevant factors that could affect your liability.
Different tiers of car insurance
Although some providers will offer a wide range of insurance options, packages and deals, essentially they all boil down to three main tiers: Third party, third party with fire and theft and fully comprehensive.
This type of policy represents the minimum level of cover required by UK law for any vehicle on the road. As the name suggests, in the event of an accident it will only cover you for any damage caused to third parties, including repair costs for their vehicle as well as compensation for any injuries that they may have sustained personally.
While basic third party cover is usually the cheapest kind of policy available, it is also the most limited. It offers absolutely no cover against costs to your own vehicle under any circumstances. Therefore, this type of policy is only really suitable to cover older, lower-value cars that would likely be written off in the event of a serious collision.
Third party, fire and theft
This middle tier offers all of the benefits of third party cover, as well as insuring your car against fire damage and being stolen. Again, like the previous tier, this policy offers will not cover your car in any other circumstances, such as a collision. Similarly, this policy will usually work out to be cheaper than fully comprehensive cover.
This is the highest level of cover you can buy in order to insure your car against the widest range of damaging incidents. While specific terms will differ from provider to provider, generally every fully comprehensive policy will pay for all damages that your car might sustain in any kind of accident scenario, as well as covering against fire damage, theft and any third party damages.
As you might expect, the trade off for this level of protection is a higher price tag compared to either of the previous two types. That’s why it is essential to carefully review any policy’s terms and conditions before you buy, to see if you can get a better price or higher level of protection elsewhere.
Factors that may increase car insurance costs
Each car insurance provider will have a basic price in mind for each of these three tiers of cover. However, when you approach them to obtain any kind of policy, they will ask you for your personal details and the details of the car before giving you their quote. These details have a great deal of influence on the final calculation of the quote, because they will give the provider a good idea of how much of a risk you represent.
Every provider has a different formula for calculating quotes but each of the following factors will likely affect the final asking price either positively or negatively:
Your gender and age: Providers will charge lower premiums for middle-aged drivers than teenagers or the elderly, since they are statistically less likely to be involved in a car accident. Or similar reasons, women tend to receive slightly lower quotes than men.
Where you live: Postcodes make a difference since providers like t crime statistics of different areas to predict the likelihood of theft or arson.
Your marital status: Though it may seem like an unfair assumption, drivers who are married are viewed as less of a risk than those who are single and as such they are generally offered lower quotes.
Your profession: This is a very influential factor because providers assume a lot depending on what you do for a living. For example, police officers, teachers and civil servants are often offered lower rates because they are considered to be more careful people by nature. Conversely, delivery drivers, long-haul truckers, journalists, anyone who’s job demands that they are on the road frequently will be offered a higher insurance quote.
Your credit score: The higher the better, since providers equate this score with how careful and reliable you are, both in terms of handling money and in general.
Your driving history: A clean driving license is one of the most positive signs an insurance provider can receive. Unfortunately, if you have outstanding points on your license, speeding infractions or other such penalties then you will be seen as more of a risk, raising the quote accordingly. Some insurers will refuse to offer you insurance at all if your record is too negative.
The car’s age: A car’s age does not affect its repair costs very much but older cars are more likely to be “written off” in a collision: i.e. they are scrapped and replaced because the cost of carrying out significant repairs would be higher than the car’s overall value. Newer cars, with higher their higher value, aren’t written off so frequently and have higher collision coverage rates as a consequences, raising the cost of the overall policy.
Car’s safety rating: High safety ratings from internationally-approved bodies such as Euro NCAP will positively affect the provider’s quote as it represents a lower accident risk.
Car’s desirability or “likelihood of theft”: Certain models of car are more attractive to professional car thieves than others, either because of their inherent value or due to some existing security vulnerability. If you own a car like this, you will likely be offered higher insurance quotes.