Anyone who drives a car – the overwhelming majority of people, in other words – knows that it is a legal requirement to have car insurance. But how many of those millions of motorists really understand all the ins and outs of the insurance they have to buy?
Most, for example, will know that probably the most basic distinction is between a so called fully comprehensive insurance and the more limited cover that is restricted to third party, fire and theft . But the barest minimum legal cover is represented by something that extends to third party liability only – that is to say, it covers only those claims against the insured driver of the vehicle for loss or damage caused to other people or their property. Third party insurance, therefore, offers no protection at all for any loss or damage (whether by accident, fire or theft) to the insured vehicle. This is what makes comprehensive cover the car insurance of choice for anyone who owns and drives a vehicle of any value – since the greatest part of most repair bills, even when the damage is caused as a result of the driver’s own fault, will be covered by the terms of the comprehensive cover.
One fascinating area of motor insurance which is often overlooked by many drivers is the subject of uninsured losses. However extensive or comprehensive the level of insurance, there will be many circumstances in which the insured driver can suffer an uninsured loss. Even though the accident might not have been his or her fault, for example, the insured will still have to pay whatever excess is applied to the policy. If a replacement car needs to be hired as the result of an accident caused by another motorist, the insured could again be out of pocket. Still more seriously, if the motorist responsible for an accident was driving illegally and has no insurance, the innocent parties to the accident have no recourse to the culprit’s insurers. Then there is the whole question of seeking damages for injuries sustained in an accident caused by another driver. All of these are examples of uninsured losses.
Fortunately, for the driver who suffers these kinds of losses, however, recourse is available through something called Uninsured Loss Recovery. Just as the name suggests, this is a service that attempts to recover uninsured losses on behalf of the person who has suffered them. Recovery might be pursued by an independent uninsured loss recovery agency or, if the insured has taken out legal expenses protection (frequently included in the better comprehensive policies), then by his or her own insurers.
Another area of car insurance which is often misunderstood by many drivers relates to the status of their no claims discount. Most will know that insurers reward customers who make no claims on their car insurance by offering a discount on the following year’s premium. Depending on the period for which the policy holder has been claims free , these discounts can range from between 30 to 65 , so they clearly make quite a difference to the annual insurance costs and are well worth having. What fewer people realise, perhaps, is that it is possible to protect such discounts that have been accumulated over the years, so that they are not lost and the insured is not knocked right back to square one if a claim needs to be made. A protected no claims discount is optional car insurance cover that allows the policy holder to make a claim without it affecting the discount when it comes up for renewal. Different insurers will apply different rules to the number of such claims that can be made, as well as to the period during which they can be made, without affecting the no claims discount. |
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