When you buy a car or any motor vehicle, there are a lot of associated costs that go with it. You need to tax your car, fill your car with fuel, pay for servicing, pay for repairs and also insure your car. You may think that’s an expense you can do without.
You could say that you’re a safe driver and won’t have any crashes. Maybe you think that because your car is in the garage every night it won’t be stolen. You may even think that your car is an old banger so it’s not worth insuring and you’ll dispose of it should it get damaged. In any of these situations, you could think that it’d be a good idea not to buy insurance and therefore save some money. You’d be completely wrong to think that.
Don’t Break The Law
It is an offence to drive a car in a public place or on public roads in the UK without having insurance. Under the Road Traffic Act 1988 you are required to be insured for your liabilities while driving a motor vehicle. This means that at the very least you need third-party insurance to protect other drivers and their vehicles if they have a collision with you and you’re to blame.
If you are found to be driving a car without car insurance the police can deal with you at the side of the road by giving you a £300 fine (this has recently increased from £200) and giving you 6 penalty points on your driver’s license. If they decide not to deal with it immediately and send you to court then the court can impose a much heftier fine and up to 8 penalty points on your license (if you receive 12 points within a year you’ll usually lose your license).
The police also have the power to seize your car and in some cases have it crushed. This is often used as a deterrent for others not to drive uninsured. So legally it’s a must to take out a car insurance policy, but what other reasons are there?
What Car Insurance Provides
Car insurance gives you peace of mind. When you buy a car it is often a big outlay and most people wouldn’t have the funds to replace their car if it was written off due to a bad collision.
Car insurance also protects you and other people involved if there are any injuries due to a crash that was your fault. If you caused someone to get injured by crashing into them without insurance and they bought a civil case against you then you could end up with a legal bill of tens of thousands of pounds to deal with. Your car insurance will usually cover this depending on the level of insurance you buy.
There are 3 levels of car insurance available usually. These are:
Third-party:
This covers the other vehicle involved in an accident with you and any people in their car. Your car is not covered at all and neither are you.
Third-party, fire and theft:
This is the same as third party but extra protection is given if your car is involved in a fire or is stolen.
Comprehensive:
This covers everyone and every vehicle involved in a collision with your car. So any repair costs for your car are also paid for by your insurer.
Honesty Is The Best Policy
You will need to tell your car insurer how you’re going to use your car. Is it just for general driving, will you drive it to work and will you do any business mileage in it? As with all insurance applications, you should be honest in how you answer this question as if you have an accident while driving to work but didn’t specify that in your application you will probably have your policy declared null and void.
Car Insurance Optional Extras
There are some optional extras available for insurance policies such as breakdown cover, a courtesy car and legal protection. Check when you buy your insurance for full details and the price you’ll pay for these.
When you take out insurance for your car then you can cover other people to drive your car as well such as your partner or children. This means that you can share your car with others while knowing they are covered if anything happens to them or your car.
Usually car insurance claims are for car accidents involving two or more cars but your policy will also cover any pedestrians that may get caught up in an accident and their property too.
Does Car Insurance Provide “Value For Money”?
While seeming like a lot of money to pay out each year, especially if you never make a car accident claim, car insurance is well worth it if you do have an accident.
Average costs of claims can run into tens of thousands of pounds even for minor collisions especially if personal injury is involved. A single injury claim for a car accident can run up to thousands of pounds in compensation.
Personal injury claims are one reason why car insurance has risen in the UK over the past 10 years. Criminals are exploiting the fact that if you hit the back of another car then insurers will almost always hold you liable for the crash.
The number of ‘crash for cash‘ claims has increased where the criminal pulls out or brakes suddenly, usually at low speed, and then makes a whiplash claim, and they sometimes make claims for people who weren’t even in the car. Fraud investigations have increased for this type of insurance crime but due to the number of payouts already made the cost of car insurance for most people has increased.
Another good reason for taking out car insurance is that you may be one of the unlucky people who have to claim on their insurance because the person who crashed into you isn’t insured. This is a pain but compared to what you’d have to pay out without insurance it’s a small price to pay.
Some insurers are now offering protection of your no-claims bonus if you do have to claim because another driver was uninsured. Check your policy for details of this type of claim.