Car Insurance

Car insurance provides three types of cover, comprehensive, third party fire and theft and third party only.

  1. The comprehensive type gives you cover for damage to your car, your possessions and also to the vehicles and property of others. Being comprehensive to this extent it costs more than the other two types of cover. If you are unfortunate enough to have an accident and your car is written off, this is the only cover that can provide you the required insurance.
  2. The third party fire and theft cover insures you for any damage you cause to the vehicles and property of other people. It, however, does not cover the accidental damage to your own vehicle and to your own things. This type also covers you against fire damage to your car and also if it is stolen. The cost of this cover is less than the comprehensive cover, but it is higher than the third party insurance cover only.
  3. The third party insurance is the cheapest kind of cover you can get. It covers the same things as third party fire and theft. It, however, does not cover you if somebody steals your car, or, it is damaged by fire.

If the price of your car is less than 5,000 pounds, you can take any one of these three types of cover. If its price is higher than this, it is suggested that you should opt for the fully comprehensive cover.

There is a wide spread competition among the auto insurance companies. As an intelligent customer you should try to find out the ways to lower your auto insurance costs.

There are certain steps that can be taken to reduce the insurance costs of your vehicle:

1. Do an extensive comparison shopping as the insurance prices vary hugely from company to company.

You can first collect information about the various major companies from the internet and then call them directly to seek clarification or the latest updates, if any. You may also contact your state insurance department to seek comparison of prices charged by the major insurance companies.

The auto insurance cover is bought not only protect you financially but also to secure your peace of mind. Moreover you have to pay the insurance costs also. So it is important to settle for a company that is financially sound and stable. The financial health of the insurance companies can be checked with rating companies such as A.M. Best (http://www.ambest.com) and Standard & Poor’s (http://www.standardandpoors.com/). You may also consult consumer magazines.

Though cost is an important factor you should also enquire about its customer services especially with regard to the consumers’ complaints. Contact the agent of a company and ask him to answer your questions.

2. Check the insurance cost of the new or old car that you want to buy.

The factors that determine the amount of premium that the auto  insurance companies charge  depend upon the sticker price of the car, its repair costs, its overall safety record and also the likelihood of its being stolen. Many insurance companies offer discounts on the features that reduce the risk of injury or theft. These features include the day time running lights and the anti theft devices installed upon the car.

3. If you are going for the insurance of an older car, you should consider dropping the collision and/or comprehensive coverage on it.

If the cost of your old car is worth less than 10 times the insurance premium, it may not be cost effective to buy the coverage. You can get the worth of your car ascertained from the banks or auto dealers. Or, you may also check online at Kelley’s Blue Book (http://www.kbb.com).. Make a thorough review of your coverage needs at the renewal time as the insurance needs tend to change with the passage of time due to depreciation and other factors.

Car insurance companies offer discounts on

  1. For low average mileage
  2. Drivers who pool to work
  3. Insurance cover for more than one car from the same company
  4. Drivers with pass plus training programs also qualify for discounts.