Private Car Insurance
Vehicle insurance (also known as auto insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, motorcycles, and other road vehicles. Its principal use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise therefrom. The specific terms of vehicle insurance vary with legal regulations in each region. To a lesser degree vehicle insurance may additionally offer financial protection against theft of the vehicle and possibly damage to the vehicle, sustained from things other than traffic collisions.
In 1930, the UK government introduced a law that required every person who used a vehicle on the road to have at least Third party personal injury insurance. Today, UK law is defined by the Road Traffic Act 1988, which was last modified in 1991.
It is an offense to use a car, or allow others to use it, without the insurance that fulfils the act whilst on the public highway, however no such legislation applies on private land.
The minimum level of insurance cover commonly available, and which satisfies the requirement of the Act, is called Third party only insurance. The level of cover provided by Third party only insurance is basic, but does exceed the requirements of the act. This insurance covers any liability to third parties, but does not cover any other risks.
More commonly purchased is Third party, fire and theft. This covers all third party liabilities and also covers the vehicle owner against the destruction of the vehicle by fire (whether malicious or due to a vehicle fault) and theft of the vehicle itself. It may or may not cover vandalism. This kind of insurance does not cover damage to the vehicle caused by the driver or other hazards.
Comprehensive insurance covers all of the above and damage to the vehicle caused by the driver themselves, as well as vandalism and other risks. This is usually the most expensive type of insurance. For valuable cars, many insurers only offer comprehensive insurance.
Vehicles that are exempt from the requirement to be covered under the Act include those owned by certain councils and local authorities, national park authorities, education authorities, police authorities, fire authorities, health service bodies and security services.
The insurance certificate or cover note issued by the insurance company constitutes legal evidence that the vehicle specified on the document is insured. The law says that an authorised person, such as the police, may require a driver to produce an insurance certificate for inspection. If the driver cannot show the document immediately on request, and proof of insurance cannot be found by other means such as the Police National Computer, drivers are no longer issued a HORT/1. This was an order with seven days, as of midnight of the date of issue, to take a valid insurance certificate (and usually other driving documents as well) to a police station of the driver's choice. Failure to produce an insurance certificate is an offence. The HORT/1 was commonly known – even by the issuing authorities when dealing with the public – as a "Producer".
All motorists in the UK are required to prominently display a vehicle excise licence (tax disc) on their vehicle when it is kept or driven on public roads. This helps to ensure that most people have adequate insurance on their vehicles because an insurance certificate must be produced when a disc is purchased, although the insurance must merely be valid at the time of purchase and not necessarily for the life of the tax disc.
The Motor Insurers' Bureau (MIB) compensates the victims of road accidents caused by uninsured and untraced motorists. It also operates a number of Motor Insurance Databases, which contain details of every insured vehicle in the country and acts as a means to share information between Insurance Companies.
An excess payment, also known as a deductible, is a fixed contribution that must be paid each time a car is repaired with the charges billed to an automotive insurance policy. Normally this payment is made directly to the accident repair "garage" when the owner collects the car. If one's car is declared to be a "write off" (or "totaled"), then the insurance company will deduct the excess agreed on the policy from the settlement payment it makes to the owner.
If the accident was the other driver's fault, and this fault is accepted by the third party's insurer, then the vehicle owner may be able to reclaim the excess payment from the other person's insurance company.
Car insurance excesses are made up of a voluntary excess, which you can choose, and a compulsory excess which is set by the insurer. If you are aged under 25 or an inexperienced driver, you will generally have to pay a higher compulsory excess.
The voluntary excess you set may affect your premium. For example, if you choose a lower excess your premium could go up in price, and if you choose a higher excess it may bring your premium down. Remember, if you choose a higher excess to lower your premium, you would have to pay this out if you are involved in a claim for which you are at fault.
For example: If you had a claim that cost £ 1,000 and a total excess of £ 250, the total that would be paid out for your claim from your insurer would be £ 750.
A compulsory excess is the minimum excess payment the insurer will accept on the insurance policy. Minimum excesses vary according to the personal details, driving record and the insurance company.
To reduce the insurance premium, the insured party may offer to pay a higher excess (deductible) than the compulsory excess demanded by the insurance company. The voluntary excess is the extra amount, over and above the compulsory excess, that is agreed to be paid in the event of a claim on the policy. As a bigger excess reduces the financial risk carried by the insurer, the insurer is able to offer a significantly lower premium.
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