Guide To Different Types Of Car Insurance
In addition to the Compulsory Third Party Insurance, there are three different types of non-compulsory covers availabe,
Here are the Guide To Different Types Of Car Insurance
Third party property damage
After the CTP this is seen the minimal non-compulsory policy. It will cover you for the damage caused by your car to other people’s property. Even if you do not think that your car is worthy of insuring taking out this policy will cover you for the damages bill if you collided with a luxury car, a bill potentially worth thousands.
This policy will cover the damage to your car as a result of fire or theft as well as provide coverage for damages caused by your car to other people’s property.
Comprehensive Car Insurance
Comprehensive car insurance is an insurer’s most extensive policy. It is also the most commonly held policy in UK. It covers you for most damages done to your car as a result of collision, flood, fire, storm and theft. It also includes cover for damages to other people’s car and property as a result of a collision involving your car.
General Exclusions for most insurance coverage
These are only general exclusions while an insurer may have many more. For more details please refer to the policy PDS.
Tyre damage not resulting from an accident
Mechanical, structural, electronic or electric failures or breakdowns
Loss resulting from not being able to use your car such as your income.
Depreciation, corrosion, or wear and tear
Loss or damaged caused intentionally by you or by someone acting for you
The less you claim, the happier your insurers will be. Insurers provide a discount if you do not claim within the policy.
Your no claims bonus grows every year you don’t make a claim. Typically the scale is:
- 30% off after 1 year
- 40% off after 2 years
- 50% off after 3 years
- 60% off after 4 years, and
- 65% or more after 5 years
If you have an accident and you claim for it, you generally lose two years’ worth of no claims bonus and your premiums go up. If you have more than one accident in a year, you might lose all of your no claims bonus.
If you have an accident and don’t claim, you keep your no claims bonus but your premiums might still go up. Please note, you must notify your insurer of any accidents even if you don’t claim. Failing to do this might mean a future claim is refused.
Protect your no claims discount bonus
With some insurers you have the option to buy ‘no claims discount protection’. You can then make claims without it affecting your no claims bonus. The terms set will vary, but you are usually allowed to make one claim in one year or two claims in three years without losing your no claims bonus.