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Car Insurance Extra Charges – Worth The Cost?

No Claims Discount

Losing their No Claims Discount is probably the issue that causes the most issues to a car insurance policy holder. Usually they will do anything to hold on to it. This is why insurance companies have now responded with No Claims Discount insurance as part of their overall car insurance package. But is the extra in the premium worth it and what about all those other charges?

Legally speaking

At some point in the last few decades fully comprehensive car insurance started arriving on the market with another item attached to the policy as an extra. This was the arrival of legal fees insurance.

Primarily this insurance was created to cover court costs. These could arise if you were involved in an accident that was not your fault and you had to dispute it or if you had to take the other person to court to claim compensation or simply to get all the costs back not covered by other insurance. Most policies provide legal cover of between £10,000 and £50,000, but some offer up to £100,000 all for very similar premiums.

Buying you own

Ironically, many people have legal motor insurance elsewhere but don’t realise it as it is often overlooked through the usual bad habit of not reading the small print. Alternatively they have simply forgotten that have paid for it elsewhere. Membership of a motoring organisation such as the RAC often provides free legal motor protection. Why pay for it twice?

NCD

Your No Claims Discount mounts up each year and continues for each year that you go without having an accident, for five to six years. It can knock a hefty 60% percent off your car insurance premiums when at its peak, so it’s worth hanging on to.

Insurance companies usually offer two ways to protect it: either it will be protected for a year, so that any accidents in that time won’t affect it, or you can get your No Claims Discount protested for up to two accidents during the entire length of the policy.

Either way, the premiums requested to protect your NCD won’t be a large as the additional insurance you would have to pay if you lost it. So unless you feel the chances of not having an accident of any kind, and therefore not claiming on your insurance, are so low that it’s hardly worth having the insurance in the first place it’s probably always worth having your NCD protected.

GAP year

Guaranteed Asset Protection insurance is handy if you have bought a relatively new car and you have used a finance agreement to purchase the car. What GAP insurance does is if you have an accident which writes off the car, then the insurance company will pay the difference between the balance of the loan and the value of the car when you bought it. In this way, the finance house gets its money back and they aren’t looking for you to repay a debt on a now non-existent car.

Pick and Mix

You need to decide whether you want car insurance that will give you the basics and so be cheap, or give you total care and that feel-good factor of knowing you are thoroughly covered if anything goes wrong.

All the extras that an insurance company would like to charge for can give you that added protection, but they hike up the cost. The final choice has to be yours; the extras we have discussed here are just that: extras. You need to decide whether you want your car insurance policy to be like a Mini or like a Rolls Royce.

For more information:

  • Where Is The Best Place To Get Car Insurance?
    The world of insurance is almost as vast as financial services in general. Everywhere you look there are companies advertising insurance. So where do you go to find the best deals?
  • What Is A Warranty?
    When you buy a used car from a dealer you will nearly always get offered at least three months warranty. If you are buying from new then you will get about three years warranty as standard. But what is it and what’s it got to do with insurance?
  • Insurance By Age and Experience
    Just as young people get penalised for being young by the insurance companies there can be disadvantages to being old too. But there are also some advantages. How do the insurance companies treat drivers of more advanced years?
  • Why Does Car Insurance Cost More For A Young Person?
    Trying to second guess what your insurance is going to cost you is a nightmare. Despite all the insurance groupings, one thing you do know is it will cost a lot more for a young person than somebody of more advanced years. Why?

Posted on: [ November 03, 2017 ]       Add to Del.icio.us   Digg it   Add to Blinklist   Add to FUrl   StumbleUpon