Let’s face facts, insurance is a terrible word. It causes fear and trepidation in the hearts and minds of many young drivers.
1. To drive, you must have insurance. Without it you are committing a crime and if caught (and remember the police can access to most information about most cars and whether they are taxed or not with just a quick check) you’ll not only face a fine of around £200, but will lose that hard earned licence.
2. Insurance can be expensive. Insurance is more expensive if you’re male. Statistics show that female drivers are statistically safer than males, which makes insurance more affordable. After the European Courts rulings on sex discrimination, insurance companies will no longer be allowed to charge different rates for male and female customers. The insurance rates for girls will rise, but it remains to be seen if the rates for the boys will drop.
You don’t want to think about insurance when you learn to drive. You should, if you want to save money! This will also impact the car that you dream of owning.
It can be difficult for a new driver to understand the terminology used by insurance companies. This glossary contains useful information about insurance terms and will help you to understand the type of insurance you need for your first car.
Groups of Insurance
Insurance groups can range from 1 to 50. The insurance premiums will be lower for those who belong to the lowest group. Higher groups will result in higher insurance costs. Parkers has a great online guide that will help you find out which cars belong in which group and where to check the group for the car you are interested in.
Insurance Premium
This is the amount that you will pay to insure your vehicle. You have two options: pay one lump sum each year or monthly instalments. Although monthly payment may seem more manageable for your budget, it will be more costly over the year.
Comprehensive Insurance
While you should carefully read all terms and conditions of your insurance, Comprehensive Insurance generally covers you, your car, as well as any property, person, or vehicle that you cause damage. Although comprehensive insurance can be more expensive than standard insurance, there are some companies that only offer this option. Uninsured drivers can cause damage to your vehicle, so your insurance will cover it.
Fire, Third Party, and Theft
Third Party insurance covers your car, but not the damage you cause to it. The coverage for fire and theft often includes insurance. This means that you will be covered in the event your car is set on fire or stolen. As minimum, you should have third-party insurance.
Claim
If your insurance company has been involved in the payment of damages or any legal proceedings, you can make a Claim. You may not be eligible for a Claim if your vehicle has suffered minor damage. For example, if someone bumps into your car, and the light goes out, they may offer to repair it without having to go through insurance. This will avoid them making a claim that could affect their No Claims Bonus. This cannot be avoided if the damage is severe.
No Claims Bonus (NCB)
You will not receive a no-claim bonus as a new driver. This is for each year you drive without having made a claim to your insurance. Your goal should be to not make any claims and to increase your bonus as much as possible. After 7 years of no claims, your premium could drop to 70%. Having a large bonus is a great investment. You can lose your entire NCB or a portion depending on how long you have been driving.
Protected NCB
If you have a large no-claims bonus, you may be able to pay a little more each year. This will allow you to make one or two claims depending on which insurance company you choose. While the NCB will not be affected by your accident, you may find that your insurance premiums go up in the next year. It’s worth looking at the cost of this additional protection to determine if it is worth it. It is probably not worth the cost in your early years of driving.
Named Driver
You will be named driver if the insurance is in your name. Named drivers cannot drive your car without you adding them to the policy. You will need to disclose their driving records, age, driving experience, and driving record. You can lower your insurance premium by having your parents or grandparents as named drivers.
If you are a named driver for your parent’s car, it is possible to be their driver. However you need to check that the insurance company will cover you and allow you to earn a no-claims bonus.
To lower your insurance premium, it is against the law for your parents to insure the car you drive. If you do have to make a claim, you may be denied coverage by the insurance company. You could also face penalties for driving with no insurance.
Certain insurance policies allow older drivers and more experienced drivers to drive your car without being named on your policy. You are responsible for ensuring that anyone you allow to drive your car is properly insure.
Smartbox, Coverbox etc.
New drivers between the ages of 17 and 24 are most at risk. This is why they have high insurance premiums. A number of insurance companies have come up the idea to offer lower insurance premiums and help new drivers stay safe on the roads. An insurance company will cover the cost of installing a box in your car. The features of the box include a GPS and/or gyroscope. They will monitor your driving habits, such as how fast you maintain speed limits, how smooth you brake, accelerate and turn corners, and when you drive. An online dashboard will show you how you drive and you may get a reduced premium if your driving is good.
After passing their test, teenagers don’t want to have to be continuously monitored on their driving skills. Parents will appreciate the smart box’s ability to make a new driver safer on the roads. The smart box will not affect your driving unless you are dangerously behaving on the roads or acting insane.
Pass Plus
Pass Plus can also help you reduce your insurance premium. A lot of companies will offer you a reduction not only in the current year, but every subsequent year as well.
Are my insurance documents required to be with me at all times?
While it might be convenient to keep your documents in the car, you will lose your insurance information if the car is stolen. It is a good idea to keep a list of your insurance company details and your policy number in your glovebox.
If you are asked for your licence and insurance by the police and they do not have them, you will be asked to bring them at a station within seven days. Make sure you have them. The police could proceed to charge you if they don’t receive them in time.
What do you do in case of an accident?
Accidents can happen. In bad weather, you might hit a piece of ice. A car could come out of a turn without even looking. It is possible to drive too fast to avoid a pet or dog. It doesn’t matter how good you are at driving, accidents can happen. You should never drive without insurance. You don’t know when you might need it or how to get it.
Your insurance company will offer you advice about what to do if there is an accident. While you hope this does not happen, it is important that you fully understand this section of your policy. Insurance companies will tell you not to admit fault.
In the event of an accident involving another person, you must exchange insurance details. You will need to exchange information with the other person if you don’t have them or they don’t. You should also note the number plates of all other vehicles involved in the accident, especially if it wasn’t your fault. Also, get names, addresses, and telephone numbers for any witnesses.