EXG 943 - Guide to car insurance

A guide to car insurance

As a driver, insuring your car is one of the most important things you need to think about. Besides the fact that it's illegal to own an uninsured car, you could also end up facing a hefty bill if you run into any problems when driving without adequate insurance.

And simply 'having' car insurance isn't the only issue. It's also important you have the right kind of insurance for you. As there are various different levels of insurance, it's important that you choose an appropriate policy for the level of protection you need.

Here's a quick look at the main types of car insurance available:

1. Third party car insurance. This type of car insurance can provide cover for any damage or injury caused by you to a third party, eg. someone else's vehicle or a passenger. If you have an accident on the road that was caused by you, you'd be able to make a claim for any costs incurred by the other driver (as long as your insurance is in order). However, you wouldn't be covered for any damage to yourself or your vehicle.

2. Third party, fire and theft. This offers the same protection offered by third party car insurance - but also protects you in the event your car is stolen / damaged by theft or fire. However, this level still won't cover you for any accidental damage to your car.

3. Fully comprehensive car insurance. This level of insurance basically provides the maximum amount of cover available. You should be covered for all of the events listed above, along with things like accidental damage to your own car, personal injury, limited medical expenses and more.

However, when looking at different insurance policies offered by different companies, it's important to remember that they all vary slightly - so be sure to check the actual terms when you're getting a quote for your car insurance.

How much will car insurance cost?

The cost of taking out a car insurance policy can vary, depending on a number of factors. A fully comprehensive policy is 'traditionally' more expensive than insurance simply covering third party, fire and theft, although in many cases this won't necessarily be true.

However, there are several other factors that could affect the cost of car insurance. Some of the main ones are:

• Age

• Gender (today - although this will change by the end of 2012)

• Where you live

• Where you park

• How long you've been driving for

• How long it's been since you last made a claim

• What type of car you own

• Whether you've made any modifications to your car

Which type of car insurance is right for you?

Again, it's important to be clear about the kind of cover you want - and that you make sure you read the terms of a policy carefully to be sure it provides just that before you commit yourself. For example, you may need to know you're insured if you drive another car, or that your policy covers other named drivers as well as yourself.