What you need to know about car insurance

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Why car insurance is important?

Car Insurance Calculator provides financial protection in case of an accident. Some types of insurance also cover injuries to others.

You legally must have at least basic coverage if your vehicle is roadworthy. This is called third-party insurance.

Only exception to this rule is when you register your vehicle as off-road with a Statutory Off Road Notice (SORN).

Driving without insurance can lead to a suspension from driving and a fine. Your car could also be taken away.

Different types of car insurance

There are three levels to car insurance coverage:

  • Completely comprehensive
  • Third party
  • Third party, fire, and theft
  • Completely comprehensive

This insurance policy is the most expensive. This insurance covers you, your vehicle and all other people involved in an accident.

It covers you for third-party fire and theft, and may also cover your driver.

This could include reimbursement for legal expenses, medical treatment and accidental damage.

You can also claim:

  • After an accident, repairs
  • accidental damage
  • Vandalism is when someone intentionally scratches your vehicle.

If you have the permission of another person, it could mean that you are legally allowed to drive their cars.

This usually provides you with only third-party coverage. This means that you don’t have any coverage if the car is damaged. This is why you should carefully review your policy details as they may differ from one another.

It is important to remember that although it provides the greatest coverage, it doesn’t always come at the lowest price.

Third party

This is the legal minimum.

It will cover you for any injuries or property damage that you cause other people. It doesn’t provide any protection for your car if it is stolen or damaged.

It doesn’t have to be the lowest coverage, but it does not mean it is the most expensive.

It might also be a good option for those who are unable to afford comprehensive insurance.

It could be anytime:

You don’t get a no-claims bonus

You live in an area considered high-risk for crime or other risks

Your car is less valuable than PS1,000 and you can still afford to purchase another car if there are any accidents.

Third party, fire, and theft

  • This insurance covers third parties, but doesn’t cover you if your car is damaged.
  • It covers replacement or repairs if your vehicle is stolen or damaged by fire.
  • It’s not always cheaper than full coverage. Always compare prices.

What is a no-claims bonus? How it works

This discount is offered by insurers to you if you don’t make a claim on your policy. With each year you do not make a claim, the discount will increase.

You can get a generous discount too. The average discount ranges between 30% and 65% after one year, and 65% to 65% after five years.

However, if you are involved in an accident and file a claim for it you will lose two years of no-claims bonus and your premiums will go up.

You could lose your no-claims bonus if you have more than one accident within a single year.

Even if you do not file a claim, it is important to inform your insurance company about any accidents that you were involved in. Failure to do so could result in future claims being rejected.

An add-on called “no-claims discounts protection” can be purchased to protect your no-claims bonus. This allows you to make claims and not affect your bonus.

Usually, you can make one claim within a year or two in three years without losing your no claims bonus.

Excesses – What it is and how it works

If you file a claim, this is the amount you will have to pay. This amount can vary depending on what type of claim you are making.

Insurers decide the compulsory excess. You can increase your voluntary excess to lower your premium.

Add safety features to your car

Your insurance company is also at risk if your car is stolen. Your insurer may offer a discount if you have anti-theft devices such as tire locks, steering-wheel locks, and electronic tracking systems. These devices are expensive upfront, but they can be quickly paid for.

Drive safely

If you are able to drive safely, auto insurers will reward you with lower premiums. You may be eligible for discounts if your driver training class is completed by some companies. You can receive a discount if you wait longer before you get into an accident or file a claim.

Drive less

You may be eligible to receive a low-mileage discount if you are retired, or work remotely. The minimum mileage you must travel is usually 7,000 miles per annum, though this can vary from insurer to insurer. You might be able lower your premiums if you are able to use carpooling, biking, walking and public transport, or work from home.

You can pay in monthly installments

Many insurers offer discounts if you pay for a whole year of coverage at once rather than monthly.

If you fall behind in your monthly payments, there may be late fees. This risk can be avoided if you pay in one lump sum.

Paperless billing and auto payment

Paper billing is expensive and requires you to purchase physical products. It also takes up a lot of insurance company resources. It’s not surprising that some insurance companies offer discounts for reducing the paperwork they need to handle and streamlining your payments.

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