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Wednesday, 3 October 2023

Buying motor insurance

You can buy motor insurance in a variety of ways. There are over 60 companies that provide insurance in the United Kingdom (UK). Some of these deal directly with customers while others offer products via insurance brokers.

How to get a quote

Insurance brokers will be able to offer you advice about choosing between a variety of products to get one that suits your circumstances. They can shop around on your behalf to find the best quote available from the companies they deal with.

Alternatively, you might want to do your own research and buy a product directly from the insurer over the phone, face to face or via the internet. Both direct providers and brokers can be easily found in the phone book or by searching the internet.

Finally, you might find it more convenient to get your insurance while you're doing something else, for example when you're at your bank or supermarket.

Questions asked when applying for insurance

As insurance is priced according to how likely the driver is to make a claim, a lot of information can be asked for when applying for insurance. Commonly, this will include:

  • the vehicle details
  • what the vehicle will be used for
  • where the vehicle will be kept
  • the ages and occupations of the people who will be driving the vehicle
  • any penalty points on your licence or convictions for driving offences
  • any no-claims bonus and how long you have been driving for
  • any recent insurance claims

It is essential to answer all the questions honestly and in detail. Once all your details have been taken, you'll be offered a quote and, if you accept the quote you will be sent insurance documents.

No-claim discount/bonus

This is a reduction in your premium in return for you not making a claim (also known as a no-claim bonus). Over a period of years in which the discount is earned (usually four or five), it can lead to as much as a 75 per cent reduction in the cost of your insurance and will stay with you if you change insurers.

You may lose all or part of your discount if you make a claim and your insurer is unable to recover its outlay from someone else. Many insurers will allow you to protect your no-claim discount for an additional fee or for a slight reduction in the discount scale.

This means that even if you make, say, two claims in a three year period you'll be able to keep your no-claim discount. Again, this practice varies from company to company. Note that it is the discount that is protected, your premium may still increase depending on your claims history.

Policy excess

This is an amount agreed between yourself and the insurer that you'll pay if there's a claim. Generally this varies between £100 and £250 and can often be negotiated. The more you are prepared to pay, the lower your overall insurance premium will be. A compulsory excess will invariably apply while the car is being used by an inexperienced driver.

The insurance documents you'll receive

There are three key documents when you take out a policy of motor insurance, the certificate, the policy and the schedule.

The certificate

This contains details of the vehicle insured, the driver(s) named to use the vehicle, the use of the vehicle which is insured and the dates for which the policy is valid. This is the document that provides legal evidence of insurance cover and is required should an accident occur, when the vehicle needs to be taxed or if you're asked to produce it by the police.

The policy

This sets out in full the terms and conditions of the insurance cover.

The schedule

Gives details specific to your policy such as excesses, no-claim discount and which parts of the policy apply in your case (eg whether cover is comprehensive).

You may be given an insurance cover note when you first take out an insurance policy. The cover note acts as a certificate and temporary policy while the full documents are produced.

With all insurance documents it's very important that you check to see that the details are correct and to get them amended if they're not.

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