A Guide to Car Insurance for New Drivers
Even when you`ve passed your driving test there is still one hill to climb before you can drive legally in the UK - you must have suitable car insurance in place.
However, research by a comparison website in December 2009 shows that an 18-year-old male driver will pay an average of £2,318.83 a year on insurance, whilst an 18-year-old female driver pays £1,237.33 on average. So with costs so high, it`s important to know exactly how car insurance works so you can ensure you`re getting a good deal.
What is car insurance and what does it cover?
Car insurance is designed to cover the costs of damage and injury following an accident - but exactly what is covered depends on the policy you take out. Broadly, there are three options:
- Third party only: Covers injuries to third parties, damage to their property and liability from towing a trailer or caravan.
- Third party, fire and theft: Third party cover plus protection for your own vehicle from theft, attempted theft and fire damage.
- Comprehensive cover: All the cover of third party, fire and theft protection plus it typically covers repairs or replacement of your own vehicle in the event of an accident (subject to exclusions). Policies vary between providers but will usually include accidental damage cover, windscreen cover and personal accident cover.
Third party and third party, fire and theft policies are often preferred by new drivers as they are a more affordable option. Should you opt for a comprehensive policy check the terms and conditions carefully for exclusions (circumstances in which you will not be covered) and to see what is covered as standard and what is offered as an `optional extra` - cover for an additional fee.
What else should you look out for?
When shopping around for car insurance there are a number of technical terms to look out for, including:
- Excess: An excess is the amount you pay towards a claim - for example if you made a successful claim for £1,000 and your policy carries a £250 excess then you would pay £250 and your insurer would pay £750. Typically the excess is divided into a `compulsory excess` set by the insurer and a `voluntary excess`, which is an additional amount you agree to pay from the outset in case a claim is necessary. Setting the excess at a high rate can lower premiums but it should be kept at a level you can comfortably afford.
- No-claims discounts: Many insurers offer discounts if you don`t make a claim on your insurance - this can be worth as much as 60 per cent off your premiums after five years.
How can new drivers get an affordable deal?
Though new drivers pay more on average than any other road users because of their lack of experience, there are ways to bring premiums down including:
- Choose the right car: Older cars with smaller engines typically earn cheaper premiums.
- Don`t modify: Modified cars cost more to insure as their specialist parts are often more expensive to repair/replace so stick to a standard specification.
- Improve security: Many insurers offer discounts if you park in a garage overnight and fit as insurer-recommended alarm, immobiliser or tracking device.
- New driver bonuses: Some insurers offer incentives to new drivers such as rapid no-claims bonus schemes.
- Take an advanced driving course: Schemes such as the Pass Plus could reduce premiums by 35 per cent in your first year.
- Shop around: Use a comparison website to compare deals from more than 100 insurers before you buy. Some specialist insurers even offer temporary learner drivers car insurance for provisional or first time drivers.