Motor Insurance - Frequently asked Questions

Can a No Claims Discount (NCD) be applied to more than one car? - You cannot use the same NCD on more than one car insurance policy at the same time.  If you wish to insure a second car in your name, then you will have to start again and earn another set of no claims bonus. In most cases if you have a good driving record, you will be able to obtain an Introductory no claims bonus.  This method may seem a little unfair at first but imagine the scenario where three cars are all sharing the same no claims bonus. It would be unfair if an accident on one car were to affect the bonus on all three vehicles.

What if I lose my Certificate of Motor Insurance? - If you loose your certificate of motor insurance, you will still be insured. It is a good idea to obtain a duplicate from your insurance company or broker, you will need this document to tax your car and to show the police.

Can somebody else drive my car for a short period? - It is normally possible to add temporary additional drivers to your policy for a short period of time but no cover will exist until a cover note has been issued by your insurance company or broker. Sometimes you may find it difficult to add temporary young drivers ( under 25).

What Types of Insurance Are There? - Third Party motor insurance is a requirement of law, The first two parties are your self and the insurance company, the Third Party refers to any other person that is involved in an accident with you. Your insurers will have to meet any claim for which you are liable and may recover this amount from you if you have made any false declaration to obtain your insurance cover. Third Party Personal Injury cover is unlimited, with regard to Third Party Property damage claims, the current maximum that will be paid by a policy is £20,000,000. This type of insurance covers nothing else, if any damage occurs to your car, you must pay it yourself.  Passenger Liability is also included under this cover.  Third Party Fire & Theft is similar to the above car insurance but is extended to cover your car if it is damaged by Fire Or Theft or attempted Theft.  Comprehensive Insurance is the widest cover available, not only does it cover all of the above but also Accidental Damage to the vehicle and Windscreen cover + Rugs Clothing Personal Effects & Personal Accident. Be careful, though, Fully Comprehensive does not mean that everything will be covered, always check your policy wording to check the extent of your cover.
 

Where can I buy Motor Insurance? - In the United Kingdom, Motor insurance is now available from a large number of sources.  Direct “ Insurance companies such as Direct Line, Tescos, Esure, Admiral etc will offer you only their own policies. These companies are very competitive but they will not be the cheapest in all scenarios. If you go to a broker or an Intermediary, they will more than likely be able to provide you with products from a panel of insurers. It is best to shop around to satisfy yourself that you are obtaining the best deal.   Any insurer or Intermediary offering you motor insurance must be authorised to do so by the Financial Services Authority.

What is the Road Traffic Act? - In 1930 the first Road Traffic Act made Third party motor insurance compulsory covering liabilities to killed or injured Third Parties. Further legislation extended this cover to include passengers and by 1990, Third Party Property damage was included. At the present moment, Third Party & Passenger Liability cover must be unlimited with Third party property damage set at a minimum of £20,000,000.  Please refer to our section on car insurance types where we outline the covers available.  The Road Traffic Act extends to all vehicles used on the road including; Private cars, vans, lorries, commercial vehicles, motorcycles, cranes, special types, bull dozers, fork lift trucks etc.

Is it possible not to take out compulsory Insurance? - Well not really but the following are examples of where compulsory Third Party Motor Insurance is not required.   If you are the owner or controller of a motor vehicle and you are prepared to deposit a sum of money (at the present moment £500,000) with the Accountant General of the Supreme Court you do not need to effect motor insurance.  Vehicles owned or driven under the control of a local authority, a police authority or the armed forces are not obliged to have insurance. Whilst some of these organisations decide to self-insure in practice the majority do effect basic Third Party Insurance.

What about Uninsured Drivers? - It is illegal to drive a motor vehicle on a public highway without adequate insurance protection being in force. If you are caught driving without insurance you will be prosecuted by the police, your licence will be endorsed and you will receive a fine. However, third parties who are victims of uninsured drivers including untraceable drivers such as in a hit and run incident, may be entitled to some compensation from the Motor Insurers Bureau (MIB). In 1946 the MIB was established by UK motor insurers to guarantee compensation for injuries caused by any motorist (traced or untraced) who had no insurance in force and who was adjudged by the courts to be negligent.  Recently, the EC directive on Third Party Motor Insurance has extended the obligation of the MIB to compensate third parties for damage to their property subject to an excess of £150.00.

How do I choose which policy to go for? - Price is always a consideration when buying motor insurance, buy the best cover that you can afford, comprehensive cover is the better choice, but for some drivers, particularly if you are young or without no claims bonus, it can be very expensive. You must take account of what your car is worth according to the insurer. Find out the maximum they would pay out if the car were stolen or was written-off, taking account of any excess you'd have to pay. Also consider the effect of loosing your no claims bonus following a claim, what will your premium be in 12 months time?

What is a no-claims discount? - A no claims bonus is offered to you by your insurance company for not making a claim.  Under the policy, for each twelve months that you do not claim, you will receive an Extra bonus up to a maximum which is usually 65%. It is a no claim bonus not a no Blame bonus, you may loose your discount if you make a claim. No claims bonus can be transferred from insurer to insurer and when your policy lapses, it can normally be used again within a two year period.

Why do car insurance premiums vary so much? - There are so many factors that affect the rating of motor insurance as you can see from one of our other sections. It is almost impossible for two people to have the same insurance premium. Also there are many, many insurance companies offering policies, some may be wishing to attract different types of business and hence will gear their premiums accordingly.

There are many companies offering car insurance. How do I choose between them?  - You should always buy the policy that suits your needs; there are many “Direct” style Insurance companies now that offer you cheap insurance premiums via the telephone or Internet, however, it may be better to try to use an Insurance broker as they will have Access to a broader range of products. Another advantage of using a broker is that they Will possibly act for you in any dispute with the insurance company.  If you needs are more complex, if you have a High Performance car etc, you may find that the Direct writers will not be able to offer you cover. Before buying any cover,  Always check the policy you have been offered to make sure that it meets your needs.

What sort of things should I tell the insurer? - You should tell the insurer anything which could be seen as relevant under your duty of disclosure. Insurers call this “disclosure of material facts“. If you are in any doubt as to what is or isn’t a material fact, you should seek advice from the insurer.  If you are insuring your student son's car in your name for example, give full details of who will be driving the car most and where it will be kept. Failure to disclose may invalidate your policy and your claim could be turned down. Always keep you insurer up to date with any changes such as a change of address or occupation.

My Insurer Has Reduced My No Claims Bonus But The Accident Wasn't My Fault? - This has always caused a great deal of problems, Remember it is a no claims bonus not a no blame bonus. If you are able to prove beyond doubt that the accident was not your fault - this is where it is important to have a reliable independent third party witness - then if you are able to recover your uninsured losses such as policy excess etc, then you should be able to have your no claims bonus reinstated

I've Just Bought A Second Car - What No Claims Bonus Will I Get? - If you have just purchased a second car then you will have to start again earning no claims bonus. However, if you have a good driving record, you may find that insurers are prepared to offer you a good Introductory amount. If you have been noted as the second driver on a policy such as in a husband and wife situation, some insurers are now even prepared to match the first bonus allowance

I'm Selling the car And Will Not Be Replacing It. I Have Maximum Bonus - If I Buy Another car can I still use this bonus. - Most insurance companies will honour a no claims bonus that has expired within the last 2 years. It is a good idea to obtain a certificate of no claims bonus from a previous insurer and keep it in a safe place. There are one or two insurers that will accept bonus that is up to three years old but this is the exception.

Do I really need Legal Expenses cover? - This really is a good policy to take out, it is relatively cheap to purchase and can help you to preserve your no claims bonus. Following a claim, you will normally have to pay an excess, if the claim is not your fault, you may obtain reimbursement from the Third Party Insurance company, your broker will not do this for you and it really can be quite time consuming. The Legal Expenses company will claim back your policy excess as well as other out of pocket expenses, they will even claim for injuries for you and if are successful, no deduction will be made from your settlement.

I've Just Received A Motoring conviction, shall I inform the insurance company? - Yes, Convictions are a material fact and you should tell your insurance company of them. Although the duty of disclosure exists at inception and renewal, it is a good idea to tell your insurers as soon as an event happens in case you forget. They will not charge you any additional insurance premium until the renewal date of the contract.

What about other alterations? - Anything that could affect your insurers assessment of your insurance policy should be disclosed to them as soon as it happens. This could include a change of address, occupation, usage of the vehicle etc. If you have to make a claim and are not complying with your insurance policies terms & conditions, then it is unlikely that you will receive a payout