Understanding The Type Of Car Insurance You Need
Car insurance is one of the few legally required insurance covers you need. It is an offence under the Road Traffic Act to drive your car on public roads without car insurance.
There are 3 types of car insurance cover available; third party only (TPO), third party, fire & theft (TPF&T) and Comprehensive.
Before taking out car insurance you need to carefully consider the type of cover you need.
- Third Party Only - by law this is the absolute minimum level of car insurance cover you need. It covers you for injuries to third parties, either passengers in your car or other people not in the car. It also covers damage to other vehicles but not your own.
- Third Party, Fire & Theft - in addition to the third party insurance as described above, TPF&T covers your vehicle in the case of fire or theft.
- Comprehensive - as standard, in addtion to the cover available under TPF&T, comprehensive insurance covers you for most types of damage, including accident damage caused by you to your car and damage to other vehicles, whether or not the accident was your fault, accidental damage to your own car, vandalism and windscreen damage. In addition, many insurance companies offer additional, optional items of cover. Some of these may be included free, for others there may be an additional charge. See our article Questions to ask as you choose your car insurance for more information on these extras.
In addition to determining the type of cover, you also need to consider what you need the car for. Is it purely for social use, will you use it for commuting or will you be using it for business related activity?
The amount you pay for your insurance, the premium, will be influenced by how you use your car.
There are 4 categories that insurers use to rate you car usage; social, domestic & pleasure, commuting, business use and commercial travelling.
- Social, Domestic & Pleasure - covers you for normal, every day type driving eg visting family and friends, going to the gym or shopping.
- Commuting - additionally this covers you for commuting to and from your place of work and parking your car during the time you are at work, at a station for example.
- Business use - is required if as part of your work day you use your car to travel to other business locations in addition to your normal place of work, for example for meetings or to visit clients.
- Commercial Travelling - additionally covers your car if it is used for commercial activity, for example in a sales related business.
Always be honest with the insurer or broker as you provide information. Giving false or inaccurate information will only cause you problems in the event of a claim eg if you opt for only social, domestic & pleasure use and then have a serious accident whilst using the car to commute to work, there will no doubt be issues with any claim.
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