Insurance Matters - For your car


How is your premium decided?

Premiums are decided by people called actuaries who work for insurance companies and assess risk. Actuaries take into account all sorts of things when assessing you for risk.

Of all the factors that effect the cost of your premium, your postcode is the one most likely send it spiralling. You're deemed to be higher risk if you live in a city or urban area - especially if you park your car in the street.

Another important factor is your age. Newly qualified drivers - or drivers under 25 - are deemed more likely to have accidents than older, more experienced drivers.

How can you cut the cost?

As a parent, adding teenage drivers to a policy can significantly increase your premium. Only do so if it is absolutely necessary. It's cheaper to consider adding a teenager on a temporary basis, for example, over the university holidays as opposed to the whole year.

The other thing that lowers your premium is 'excess'. This term refers to the amount of money you're willing to stump up to pay for any repairs.

The more money you're willing to pay out as excess, the lower your premium. The average excess is £200, but can be higher, depending on how deep your pockets are or how likely you think it is that you'll have an accident.

What type of motor insurance do you require?

As it's illegal to drive in the Britain without insurance, the minimum type of cover you can take out is 'third party'.

This covers:
liability for injuries to other people, including passengers
liability for damage to other people's property
liability of passengers for accidents caused by them
liability arising from the use of caravan or trailer while attached to the car

The next step up is 'third party fire and theft'.

This provides the above cover plus:
fire or theft of the vehicle

'Comprehensive' insurance provides cover for the above, plus:

accidental damage to your car
a personal accident benefit
medical expenses
loss of or damage to personal effects in the car

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