While you might have budgeted for your new car, it’s important to look at the other costs associated with your new wheels to make sure you have room in your budget to pay for all the extras.
And it’s not just fuel and furry dice you should consider, but insurance too.
What is car insurance?
Everyone should have car insurance to drive on the road, however, in recent years there has been a worrying trend in the rise of uninsured drivers on our roads. Whether that’s because people believe their chances of having an accident are low, or because it wasn’t a cost they factored in when purchasing a car, it is a legal requirement.
Car insurance provides financial protection in the event of an incident which causes damage or injury to another person, vehicle, property, or animal. Depending on your policy type, this may or may not include repair costs for damage to your own vehicle as a result of the incident, theft of the vehicle and damage to the vehicle caused by other reasons. The only cars that don’t need to be insured are those cars that are registered as off-road with a Statutory Off Road Notice (SORN).
You only need to claim on your policy when an accident is your fault. If another driver is to blame their insurance should pay instead.
Why do I need it?
Besides being required by law, having car insurance also offers you financial protection. You must have at least Third Party Only cover if your vehicle will be driven or parked in a public space. This means that in the event of an incident, no third party is left stranded financially – this means that they can make a claim for any costs incurred from the insurer.
In addition, having car insurance also gives you and drivers around you peace of mind, that in the event of an accident they won’t be left with a big bill to pay, and potentially no car.
What are the different types?
There are three levels of car insurance cover:
Comprehensive: Covers you, your car, your passengers, and property, as well as any third parties involved in an accident. It also covers your car against theft and vandalism. Some comprehensive polices will allow you to drive other cars – but it’s always worth double-checking.
Third party, fire and theft: Sometimes known as TPFT policies, these cover third party accidents only, as well as providing protection for your car against theft and damage caused by fire. It will not pay out to cover damage to your vehicle after an accident or act of vandalism.
Third party: This is the most basic policy type and covers liability for injury to others and any damage to third party property only. This level of cover is the minimum legal requirement.