Third party only
The minimum level of cover required by law to drive in the UK. Covers you for the cost of any claims for damage you may do to another person, vehicles or property. If you are in an accident which is your fault, the insurer will pay your liability to the other people in the accident.

You're not covered for damage, loss or theft of your own car or possessions.

Third party, fire and theft
Includes third party cover, and also insures your own car for damage or loss caused by fire or theft.

You have to pay for damage to your own car or possessions, apart from loss caused by fire or theft.

Comprehensive
Covers you for third party fire and theft, and in addition damage to your own vehicle. There may still be some exclusions so always check. Some insurers may refuse comprehensive cover for high risk cases.

Usually more expensive, but the most popular type of policy in the UK, accounting for over 70% of policies sold.

What are insurance add-ons?
First there is Legal Cover or ULR (uninsured loss recovery) which insures you for any losses or additional damages that you may want to pursue from a third party. For example, if you are involved in a road accident that was at least partly the fault of the other person, you will probably need someone to: Pursue the claim for compensation if you are injured; Negotiate money for repairs if your insurance is Third Party or Third Party Fire and Theft; Recover your comprehensive policy excess; Assist you to claim to cost back if you hire a vehicle or are unable to work.

Negotiations to prove the other person was negligent are increasingly difficult, time consuming and potentially very costly in terms of fees. Expert negotiators will help evaluate your claim, collect evidence and negotiate with the other person and their insurers. If they are unable to obtain the right settlement for you, they will provide a solicitor and pay up to a certain amount in legal costs to fight your claim through the courts.

Legal cover or ULR usually costs around £10-20 extra on your policy.

Second, there is Breakdown or Road Assistance which can also be provided by organisations such as AA, RAC, GreenFlag. In many cases, your car manufacturer or dealer already probably provides you with this cover - as part of the car purchase scheme.

Which 5 items affect premiums?
Simply, they are:

• your car type (find your car insurance group )
• where it is parked (garaged, alarmed, on the street, or off-street parking, etc)
• the cover you want ("3 standard flavours" and "special flavours")
• your age and occupation( Government criticises "cherry picking")
• the company's marketing stance(Insurance Premiums on the increase)

Insurers do change their marketing stances, and from time to time, give cheaper quotes to different sections of the community. For example some insurers may opt NOT to insure young, high risk drivers, others may strongly favour older drivers with family cars living in secure areas. So its a MUST that you shop for a range of quotes and ask about hidden extras BEFORE you buy.

Can improving my car security help my premium?
The most important thing about an alarm, immobiliser or tracker is that it will help deter crime. In addition if you choose the right type of security it can also help reduce your insurance premiums.

Insurers usually require that it's a Thatcham approved device, and you'll be asked to prove it. You can check whether you have a Thatcham alarm…

If you have purchased a new or second hand car with the alarm fitted by the manufacturer you should find details of the alarm in your log book.

If you have had the alarm fitted yourself, you should have been given a Thatcham certificate when you had it installed.

For some expensive cars, insurance companies may actually require you to have an approved alarm fitted before they will insure the car - especially if they consider you to be in a high risk crime area.

Remember, if you do opt for the alarm/immobiliser discount, you need to make sure that it's in operation every time you leave your car. If your car is broken into and your alarm wasn't switched on, the insurance company may not pay out.

Does the number of drivers affect my quote?
Generally, the more people driving your car, the higher your premium. It's better to decide who will be allowed to drive and choose an 'insured and named' policy.

If you want to leave the car insurance open for anyone to drive, you can opt for an 'any driver' policy. You'll usually pay more for this but it is more flexible, although there may be restrictions - for example, many insurers do not allow driver's under 25 on an 'any driver' policy.

For each driver there are a number of criteria that can affect your quote:

Age - generally if a driver is under 25, insurers will increase the premium. Above this you may get discounts, but it varies from company to company. Claims and accidents history - depending on the nature of the claim or accident, insurers may increase your premium Convictions Disabilities

Some insurers take into account other factors such as whether you are a homeowner, how long you have held your licence, marital status, etc.

You are obliged to disclose all material facts about yourself and anyone who is driving the car. If you do not, your insurer may not pay out if you claim.

What is excess and how does it affect my premium?
On most insurance policies there's an amount which you have to pay in the event of a claim.

This varies for the type of claim e.g. accident, windscreen damage, and it can also vary between drivers e.g. if you have a young driver on your policy, a higher excess may apply if they're driving.

Most policies have a 'compulsory excess' which is fixed, and then a 'voluntary excess' which you can vary. Changing your excess level is a way to alter your premium. It means you can choose to take some of the risk by paying a higher percentage of any claim, and this will reduce your premium. It is worth trying different excess levels and seeing how it affects your premium.

Can I improve my no claims bonus (NCB)?
If you have a claim free (not blame free) record, you'll usually qualify for a discount on your insurance premium called a NO CLAIMS BONUS, sometimes also called a NO CLAIMS DISCOUNT.

Scales vary, but generally range from 30% for one claim-free year, up to 60% or more after four or five years. They're transferable between insurance companies, so you can change insurer without losing your no claims bonus, providing you can provide proof.

If you have a maximum no claims bonus (usually over 4 years), you may be entitled to protect this for an extra premium. This is usually a small extra fee that allows you to have a number of claims without it affecting your no claims bonus. Typically, two claims are allowed in a three to five year period. Well worth considering if you have built up a full no claims discount, as even small claims, for example for a break in, can mean you lose your no claims discount.

Many people are not aware, but even if you have never held motor insurance, and do not have a no claims bonus, many companies offer 'introductory discounts'. You could be eligible for one if:

You have previously driven a company car but recently given up use of it. You own and insure other cars, and have built up a no claims bonuses on these. You have been regularly driving another car e.g. your parent's car, and there is a no claims bonus earned on this vehicle.

It is worth asking (Ins and Outs of NCB) in case any of these apply to you.

Why is insurance so expensive for young drivers and how can I reduce the cost?
A young driver unfortunately is categorised as 'high risk' by most insurance companies. They have no driving history, and empirically have a bad claims record, especially young men. Some insurance companies will specialise in insuring these kinds of drivers, and the only way to find out who these companies are is to shop around. Using a broker or intermediary will give you access to a range of quotes in one go, and gives you a better chance of finding a good deal. There are two type of things you can do to try and get yourself a better quote. Firstly, there are a few things that are worth asking for, which may be offered by certain insurers under certain schemes, for example:

Although the young driver has no NCB of their own, if they are a named driver on another policy (for example a parents car) they may be eligible for an introductory discount. If this applies you should check whether this is available. Some insurers also offer schemes which gives young drivers the ability to build up a no claims bonus more quickly, by offering 6 monthly policies. While this may not help your premium this time, rest assured it will bring it down more quickly over time than a traditional annual policy. You could also consider getting a 'pass plus' certificate. This is a way of telling the insurer that the driver is well trained, and some insurers may give a discount as a result.

The second type of thing you can do is to essentially reduce the risk the insurer is exposed to, reduce the level of cover. There are two main ways to do this:

You could fit an alarm or immobiliser to the vehicle. This will need to be a Thatcham approved device, and fitted by a Thatcham approved garage, so you should check this before you purchase. Consider opting for Third Party Fire and Theft cover instead of fully comprehensive. This will cover any damage caused to third parties in an accident, as well as damage to your own vehicle in the event of fire or theft. It will not cover damage to your own vehicle following an accident, but it will keep the premium lower for the first year, until the young driver has built up a no claims bonus. Secondly you can increase your excess. This means that in the event of a claim, you pay a higher amount. For example an excess of £300 means you will pay the first £300 for any damage, your insurer will pay the rest.

Why does it take so long for car insurance claims to be settled?
Not all insurance claims take a long time to settle, it very much depends on what type of claim it is, what type of insurance it is what type of policy you have.

If you have an accident and your car is damaged, if you have comprehensive insurance with a courtesy car as part of the package you'll probably find your car is taken away, repaired and returned to you within a week or 2. You simply pay your excess and the insurance company will deal with the rest of the claim with the garage on your behalf.

If however, there are third parties involved, then the claim is more complicated, and your insurance company will need to establish who was at fault and therefore who should pay for the damage. If this situation does befall you, then having legal cover or ULR (uninsured loss recovery) is important, as this will cover you for costs incurred pursuing your claim with a third party.

New legislation - the Civil Justice Reforms - introduced on 26th April 1999 should improve this process for consumers. If you are involved in a case where you need legal representation (e.g. a third party claim, or personal injury claim) there are now specific deadlines that the third part or their representative must comply with:

• They must reply to your initial claim within 21 days
• They must investigate and communicate a decision to you within 3 months

What if agreed annual mileage changes?
If I agreed with my insurance company to do a certain amount of mileage (8000 per annum, for example) and I find that I've covered that amount in only half a year or so, what happens at the end of the year?

If you find that your actual mileage for the year is going to be materially different to what you stated when you first took out the policy, you should let your insurance company know as soon as possible. They will discuss with you the impact this will have on your insurance premium.

In some cases you may find that such changes have no effect on your premium, but at least your insurer will have accurate records. If there is an effect on your premium, they will arrange with you a suitable method of payment for the extra.

It is important that you inform your insurance company of anything where there is a change to information on which your policy was issued. If you do not, you may find that your insurance company do not pay the full amount in the event of a claim.

What do I do if I have an accident?
The first thing you should remember is that if you are involved in an accident, and there is injury to someone, or damage to someone's property you are required by law to stop. The scene of the accident is no time to argue over whose fault it was. Though you may feel very strongly, you will not resolve it. You are also strongly advised not to admit fault, even if you think you were to blame - leave this to your insurer to sort out. The most important thing is to keep a clear head, and if necessary make a note of what happened, as you saw it. You will have to convey this to your insurer.

So keep calm, make a note of the other drivers involved in the accident, including their insurance details, and registration numbers. Again this will save time when the insurer comes to deal with your claim.

If there are witnesses that are willing to offer an independent viewpoint take their names and address as well.

You should contact your insurance company as soon as you can so that they can start the claims process. If there is damage to your vehicle you need to find out what the procedures are. You may be entitled to a courtesy car while yours is being repaired. Don't forget that you will be required to pay the excess when you take you car to be repaired. You may be able to get this back later if the accident was not your fault, and you are able to claim the costs back from a third party.