The basics to car insurance

What documentation or paperwork will I get?

Once you have taken out an insurance policy, your insurance company will send you:

A certificate of insurance (or a cover note which is a temporary certificate)
A schedule and/or policy document
A policy booklet (or they will tell you where you can access one)

Your certificate is evidence that you are legally insured and is one of the documents the police will ask to look at if you are stopped while driving.

If a broker or insurer needs time to complete their paperwork before issuing you a full certificate, they will send you a cover note. This gives you the same protection as a certificate, but is usually only for a limited period, for example 30 days.

The schedule and/or policy document is different from the certificate. It sets out the full terms and conditions of your insurance policy.

The policy booklet sets out all the terms and conditions of your policy. It will tell you exactly what your policy covers and what to do if you need to contact your insurance company.

Remember! You should always read all the documents sent to you to make sure all the details are correct and that you have the level of cover you need. If you have any concerns or queries, contact your broker or insurer.

If the information you give to your insurer is not correct, it could invalidate your insurance if you have to make a claim against your policy, which means the insurer may not pay out for your claim.

You also need to tell your broker or insurance company everything you believe to be relevant or important that may affect your policy; about you, your driving history, claims or convictions, etc.

You are required to inform them of any relevant information whether or not they have asked you about it. This means literally everything that relates to you as a driver/road user and your vehicle.

Remember! Keep all your policy documents in a safe place just in case you need to prove you've got car insurance during the policy term.

What is included in my policy?

What your policy covers depends on what type of cover you have chosen and any additional cover you may have bought. Your policy documentation and policy booklet will explain exactly what is covered under your car insurance policy.

What types of policy are there?

There are three main types of policy which each offer a different level of cover.

Third party only (TPO)

This is the minimum level cover required by law in the UK. It covers:

Liability for injury to others (including passengers)
Damage to property
Liability whilst towing a caravan or trailer

It does not cover you for accidental damage to your own vehicle, you will have to pay for that yourself.

Third party fire and theft (TPFT)

This covers everything that third party only does, plus:

Fire damage
The theft of your own vehicle; or
Damage to your car caused during the theft

Comprehensive

Comprehensive is the most extensive cover and includes everything Third party fire and theft does, and usually:

Loss or damage to your vehicle
Windscreen cover
Personal effects
Accidental damage
Medical expenses

Remember! Some insurance companies are now offering cheaper policies that offer less protection, known as 'stripped down' policies. For example, they may have taken off windscreen cover or reduced what you can claim for personal effects - so always check your policy documents to make sure you have the cover you want.

Can insurers exclude things from policies?

Most policies will feature key exclusions. These will be outlined in your policy documents, and will highlight all of the areas that your policy will not cover. For example you might not be covered to drive other cars if you are under 25 and you will not be covered to race your car under a normal insurance policy.

Will I be covered by my insurance if I drive another car?

Sometimes we need to drive another car in an emergency or at short notice, for example if your car breaks down and you need to borrow a friend's car. Some insurance companies will allow this, you need to check your policy documents to see if you're covered.

If you do have this cover, the following usually applies:

It is third party only cover on another vehicle, you won't be covered for any damage to the car you are driving
The car must be currently insured by another party
You have the owners' permission to drive
You can only use it for cars that do not belong to you; or
Vehicles not hired to you under a hire purchase agreement
It is for emergency cover use only, not for day to day use

What is an excess?

An excess is what you are liable to pay towards any claim. It usually has to be paid to the garage fixing your car once it's repaired before you can drive it away.

Let's say you damage your car by reversing it into a wall. This is known as an accidental damage claim. If your accidental damage excess is £250 and the cost of repairing your car is £600, your insurance company will pay £350, and you will have to pay the garage the remaining £250.

The main excesses types are:

Compulsory excess

Is set by your insurance company
Depends on the details you provided to them when you took out your policy
Higher excesses are more likely on policies with young drivers or high value cars

Voluntary excess

When you take out a policy, you choose to pay more towards the cost of a claim
Generally reduces the price of what you pay for your insurance when you buy it
Is paid as well as any compulsory excess

What about no claims bonus?

No claims bonus is a reward for people who don't make a claim on their policy. Insurance companies will usually give a discount for claim free driving, it is a 'no claim' not a 'no blame' discount, so if you do claim on your policy despite an accident not being your fault, it will affect your no claims bonus unless your insurer recovers their costs from the other driver's insurance company.

The basics of no claims bonus are:

For every fault claim you make, you lose 2 year's bonus
Most insurers have maximum no claims discount levels, commonly 4 or 5 years
You can usually protect your bonus once you reach the maximum discount level
If you protect your no claims bonus and make a claim, you do not lose 2 year's bonus, you will still receive maximum discount on your policy
What you pay for your insurance may increase when you renew your policy as you have made a claim (insurance companies see policies with claims as a greater potential risk than claim free insurance policies)

How do I make a change to my policy?

If you want to change anything on your policy such as your address or add another driver to it, you need to tell your insurer so they can update their records. Your insurance company may make an administration charge for changes to insurance policies, and your premium may change depending on what change you are making.

For example, moving house from a rural area to an inner city area may increase your premium because your insurer's statistics could show more claims are made in these areas, so the risk to them of insuring your car has increased (it would cost them more if you make a claim).

Some insurers have an online service so you can make changes to your policy yourself, alternatively you need to phone their Customer Services department as soon as possible.

Remember! You must tell your insurance company if your details have changed as they may not pay out on a claim if you don't.

What if I want to cancel my policy before it has ended?

Your insurer may charge you if you want to cancel your policy before it is due to end. There may be a cancellation fee to pay as well as a percentage of your premium. Your insurer's cancellation rates can usually be found in your policy booklet. You will need to phone your insurer to cancel your policy.

How do I make a claim on my policy?

If you have an accident or your car is stolen, you need to tell your insurance company as soon as you can. If you have an accident but are not claiming, you still need to tell your insurer.

Your insurer will then take the details of your claim and if your car needs repairing they will tell you who their approved repairers are in your area (an approved repairer is a garage that your insurer has a contract with to repair vehicles on their behalf), and arrange for it to be repaired.

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