Car Insurance - the basics

Car insurance, sometimes called motor insurance, is there to protect you and other road users. 

It protects motorists against liability in the event of accidents they may cause, to either someone else's vehicle, passengers or indeed your own.

The Road Traffic Act requires all motorists to be insured against their liability for injuries to others (including passengers) and for damage to other people's property resulting from use of a vehicle on a road or other public place. It is an offence to drive your car or allow others to drive it without insurance.

There are two main kinds of car insurance cover available:

Comprehensive insurance gives you more cover because it can also offer protection for accidental damage, theft, fire damage as well as liability towards third parties.

Third party insurance protects you against liability should you injure a third party or cause damage to a third party's property, but does not provide any cover for your own vehicle or property. A more popular version of this cover is known as Third Party Fire and Theft which provides with additional protection against fire damage or the theft of your vehicle.

Commercial use insurance is also available for company owned cars used for business purposes.

How car insurance works

When you buy a car, van or motorbike you will need to arrange insurance straightaway. Motor insurance is normally valid for a 12 month period, after which your insurer will contact you with renewal details. 

Getting a quote

You'll need to contact an insurance provider and provide them with plenty of information about yourself, including your driving history and the details of the vehicle you want to insure.

The insurance quote you receive from them will be influenced by a wide range of factors, which include:

• Where you live.
• Where you park your vehicle.
• What type of car you drive - more expensive and more powerful cars are generally more expensive to insure.
• Any previous accidents or motoring convictions.

Policy excess

Most policies include an excess, this is the amount you will be expected to pay towards the claim. There are two types of excess; a compulsory excess and a voluntary excess. A compulsory excess is one that the insurance company will impose - these can vary by your age and driving experience. A voluntary excess is usually in addition to your compulsory excess. Should you choose to pay a higher voluntary excess, your policy premium should decrease.

If the accident was not your fault you may be able to claim back the excess from the third party.

Paying the premium

The premium in simple terms, is the amount you will be paying for your insurance over the term agreed. Usually you can pay for your car insurance over the phone or by applying online. Either way, you can decide to pay using your credit card, debit card or by setting up a Direct Debit. 

Many insurance providers will offer paying by Direct Debit as an option, enabling you to spread the cost by paying smaller amounts in a series of monthly instalments over the period of your cover. However, this is often accompanied by a credit charge. So, if you can do so, it's generally cheaper to pay your premium up front in one lump sum. 

Important documents

Once you have paid for your insurance cover, which is usually for the year, you will be sent a Certificate of Motor Insurance. This is the documentary evidence of insurance you are required to have in your possession by the Road Traffic Act.  It is often referred to as your insurance policy and usually has a policy number and the name of anyone who is insured to drive the vehicle.  The main policyholder is usually the person who owns the car and / or is the main driver.

Making amends to your policy

If your situation changes during the period of cover, for instance you move house or want to add another named drivers to the policy, then you can contact your insurance provider to amend your policy. However, there may be a charge for this if it affects your insurance rating.  Some insurers may also charge an administration fee when you make a change to your policy.

It's important to keep your Certificate of Motor Insurance safe, as you will need this document if you are in an accident or if you need to make a claim. You will also need to produce this document when you buy your road tax.