Car Insurance: Things To Be Aware Of

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Car insurance is expensive, and some drivers pay much higher premiums than others, which doesn’t seem fair, but there are various reasons for this. This article looks at some of the reasons why there may have been a big hike in how much you pay for car insurance.

Why are Insurance Rates so High?

The first thing that you need to remember when it comes to your insurance premiums is that insurance companies are there to make money. If a car is stolen, the owner will generally make a claim on their insurance, providing they have the right kind of policy. Every time insurers have to pay out, whether it’s an accident or a theft, you or the other party will put through a claim to your insurers. Any one of the following issues may mean quite a big rise in the cost of your motor insurance policy.

Moving House

You might think that the decision to move house should have nothing to do with how much you pay for your car insurance, but you would be wrong. Insurers have to keep track of which areas experience the highest number of car thefts in any given month, because this can cost them a lot of money. So, if you have moved somewhere that your insurer has tagged a high-risk area, you could see a dramatic rise in your payments next time they are due.

Having a Garage

If you live in a home that has a garage, then your insurance premiums are likely to be lower than friends and family members who don’t. Those who live in a home without one, and then move to one where they do have access to a garage, could find that next time they have to renew their policy, the premiums are lower. Even if you don’t have a home with a garage, but have access to one and use it, this could result in cheaper car insurance.

Type of Policy

Not all motor insurance policies are equal. Fully comprehensive insurance is more expensive, but could save you money in the end. If you are a new, or younger driver then 3rd party insurance is cheaper, but it has other drawbacks.

Third Party Fire and Theft

You may believe that “third party fire and theft” insurance is all that you need on your vehicle because you are not prone to accidents. In reality, having this type of policy or level of insurance could cost you money, rather than save it. The policy will cover you if your vehicle is stolen, or if it is damaged by fire. If you are involved in a road traffic accident, however, and it’s your fault, the policy will pay out to the other driver. Third party fire and theft mans that you will have to cover any damage incurred to your vehicle if it’s involved in an accident.

Fully Comprehensive

Fully comprehensive insurance does what it says on the tin, and covers you for most eventualities, including damage to your vehicle. Check with your insurer whether this includes European breakdown cover, as some policies only include UK breakdowns.