Car insurance is, of course, a legal requirement for any motorist to have, but it is important that people are aware of the different types available to them so that they can find the right type for their needs and avoid overpaying or not having sufficient insurance in place. These are the main types available:
Third-party
Third-party is the most basic form of insurance available. This will provide coverage for damage caused to other people’s property and costs related to injuries sustained in an incident caused by the covered driver. This means that it does not cover the cost of damage to your own vehicle or if the while is stolen or damaged by fire.
Third-party Fire & Theft
Third-party fire and theft covers the same as the above but with protection against loss or damage if your vehicle is stolen or damaged by fire.
Fully Comprehensive
Fully comp is the most extensive level of cover which provides financial protection for damage to your own car and damage suffered by anyone else whether this is from an accident, fire or theft. There is a misconception that this means that it will always be the most expensive type but you might find that it is cheaper if you look around and you will need to read the terms and conditions.
Compulsory & Voluntary Excess
Insurers will usually require you to pay a certain amount towards repairs when making a claim which is known as the excess. Compulsory excess is the amount determined by the insurer and you will have to pay this amount to make a claim (this is often higher for new/young drivers and those with expensive vehicles). Voluntary excess is the additional amount that you are willing to pay – this could lead to a reduction in your premium.
GAP Insurance
Finally, GAP insurance is an optional type of cover but one which is intelligent and could save you a fortune. GAP insurance will cover the gap between the insurance payout if the car is written off (the current market value) and the amount that was originally paid/outstanding on the finance agreement. Due to the rate of depreciation, this could be a huge amount particularly for newer cars.
These are the main types of insurance that you can get. It is important that you think about your own situation to determine what level of cover works best for you but you must also always do your research and read the small print to make sure that you are getting adequate cover.
