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Motor insurance is a legal requirement, and a policy provides protection against potentially cripplingly high costs. If you cause an accident that results in someone dying or being seriously injured, their claim – or that of their next of kin – against you could run into millions of pounds. It’s for good reason that there are severe penalties for being caught driving without insurance.
The cost of your insurance premium depends upon many variables, including age and experience, motoring history, engine size, insurance group, your occupation, annual mileage, and post code.
When looking for a motor insurance quotation, it’s important to go to a broker rather than directly to an insurer, as this is the only way to gauge value and be sure you don’t pay over the odds for your cover.
There are many online brokers, including the AA and Quoteline Direct, and just as many in the high street. Brokers search a raft of different companies and present the customer with a host of cost options.
It’s rarely wise to just opt for the cheapest quote, as not all offer the same quality of cover or service, and in this respect a good broker can help you sift through the pros and cons of each and come up with the ideal policy. Think of the extras you might want in the event of a claim, such as a hire car while yours is repaired. Of the basic three types of cover – Third Party, Third Party Fire & Theft (TPF&T) and Comprehensive, which makes sense for you?
If you‘re under 25 with a cheap car it’s unlikely that going for comprehensive insurance cover will make sense. Comprehensive is the ultimate cover, as it protects the value of your car whoever causes damage to it (even you). But it is the most expensive cover, so one year’s cover could cost more than the value of the car. That makes no sense, so the next two levels must be considered.
Is TPF&T the right choice? If the car’s value is £800, and the best premium quote you can get for that level of cover is £1000, there’s little point in it. If your car is stolen or catches fire you stand to be reimbursed, but making the claim will lose you your no-claims bonus, increasing the cost of the next annual premium. And you may have to pay an excess on the claim, which could be as much as £600.
If the premium for the minimum third-party cover is only £500 though, it makes more sense to opt for that, as the total additional cost of having TPF&T cover AND making a claim could ultimately be as much as £500, or even exceed it.
This is in the realm of the disposable car, so the most economical option is to suffer the loss of the car, and buy a replacement. Of course, it might not come to that at all.
 These are just example costs, and so it’s important to weigh up all the costs involved on a specific, individual basis. What you must remember is that if you have an accident under TPF&T or third-party cover, as long as the accident was not caused by you, the insurance policy of the other driver will pay for your repairs or provide the replacement value of your car. But the accident might be caused by you, and without comprehensive cover you will have to suffer the cost of the loss.
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