Car insurance typically covers damage to your vehicle and damages to others, varying by policy type: third party, third party fire and theft, and comprehensive. Premiums are influenced by factors like driving experience and vehicle type, while an excess is the amount you pay towards a claim. Coverage may extend to driving overseas, and a no-claims bonus provides discounts for claim-free driving, although it can be affected by making claims.

1. Car insurance
explained

2. What does car insurance cover?
▪ It depends on the type of policy you have, but car
insurance typically covers your vehicle, the damage that
you might cause to other vehicles, to the property of
other drivers and to other motorists generally.
▪ However, car insurance can include, or can be extended
to include, cover for a host of different items, including
personal belongings, medical expenses and breakdown
assistance

3. What are the main types of car insurance?
▪ There are three main types of car insurance policy:
▪ Third party
▪ Third party is the lowest level of cover, protecting you against
damage that's caused by you or one of your passengers to others.
That includes damage to other drivers and their vehicles as well as
accidental damage to lampposts and walls. Third party does not
cover your own car – you'll have to foot the bill for any damage
yourself.

4. ▪ Third party, fire and theft
▪ Third party, fire and theft covers everything included in third
party cover, but it will also pay to repair or replace your car if it's
stolen or damaged/destroyed by fire.
▪ Comprehensive car insurance
▪ Comprehensive car insurance is the widest level of coverage
available, including third party and third party, fire and theft, but
also covering wider damage to your own vehicle. Some policies
will also cover you to drive the cars of others – and sometimes hire
cars – but usually only up to third party level.

5. How is my car insurance premium worked out?
▪ Insurers set the amount you'll pay based on a number of factors,
including your record as a driver, your personal circumstances
and your car itself.
▪ For example, if you're an older driver with years of experience,
living in a relatively safe area and driving a sensible car, your
premium will be relatively cheap. However, if you're a young,
inexperienced driver with a high-performance car, the cost of your
cover will be much higher.

6. What is an excess?
▪ An excess is the amount you pay towards any claim you make on
your car insurance policy. For example, if you have a claim worth
£500, and you have a £100 excess, you'll only receive £400 from
your provider.
▪ Most car insurers have two types of excess. A compulsory excess,
which they set and can't be modified, and a voluntary excess,
which you can set yourself.
▪ Remember to set your voluntary excess carefully, if you're willing
to contribute a large amount towards a claim your insurer will
reward you with a lower premium but this could make claiming
on your policy very expensive.

7. Am I covered to drive overseas?
▪ When you drive your own car in the EU, your insurer will
automatically provide cover to meet the minimum legal
requirements of the country you're driving in. But this is rarely
more generous than basic third-party insurance.
▪ If you have comprehensive cover your insurer may extend your
policy for a limited time overseas at the same level. This 'free'
allowance period can vary between insurers from a long weekend
to a whole year's worth - although 60 to 90 days is fairly common.
Once the period elapses, your cover reverts to the basic legal level.

8. What is a no-claims bonus and should I protect
it?
▪ A no-claims bonus is a discount car insurers offer you if you can
stay claim free for an extended period of time. Depending on
which insurer you are with, every year you go without a claim will
lead to a larger discount.
▪ However, your no-claims bonus will be cut if you make a claim,
but the size of the cut varies between insurers. Insurers also have
different policies on whether a claim that isn’t your fault will affect
your bonus.
▪ You can limit the impact of a claim on your bonus by paying to
protect it. You'll typically have to pay 10% to 15% of the premium
and it's usually available only after four years with the same
insurer.

9. ▪ If you protect your no-claims bonus, making one claim in a year
will see your discount fall or disappear. Making two claims in a
year won't affect your no claims with some companies, but with
others your no claims could be reduced.
▪ Remember, a no-claims bonus does not protect your premium. If
you make a claim your insurer will take this into account and the
cost of your cover may increase while the percentage discount you
get may remain the same.

10. Insurance Company
Al Buhaira
Tower, Khalid Lagoon,
Buhaira Corniche.
P.O. Box – 6000
Tel: 06 517 4444
Fax: 06 574 8855
E-mail:abnicho@albuhaira.com