Car insurance

There are three levels of car insurance:

• third party only - the basic legal requirement
• third party, fire and theft (TPFT)
• comprehensive, which adds accidental damage to TPFT.

The following factors affect the premium:

• level of excess - usually there is a minimum
• no-claims bonus, which can be protected by paying extra
• car age, value and annual usage ~ whether the car is used for work ~ number of drivers and their ages ~ whether you have a garage
• whether you have an alarm and/or immobiliser.
• Check these points in the policy wording:
• Does the insurer reserve the right to cancel the policy in the event of total loss?
• Is a replacement provided if your car is under repair?
• Do you lose your no-claims bonus even if an accident is not your fault?
• Are windscreens excluded from no-claims bonus?
• How much cover is there for personal items stolen from the car?
• Are the insured drivers covered when driving another vehicle? (If so, it will be third party only.)

The possible loss of your no-claims bonus means you should consider carefully whether to make a claim for a relatively small loss, but any accident must be reported.

Summary points

Do you have cover for loss of income due to death or permanent incapacity of the breadwinner in your family?

• Do you know how much statutory sick pay you are entitled to and for how long?
• Is it enough, or do you need insurance?
• What about redundancy pay?
• Do you know your current entitlement?
• Do you need more cover?
• It is dangerous to be under-insured.
• Have you checked your buildings cover recently?
• Have you included additions?
• Have you been round your home to check the replacement value of the contents?
• Are you aware of the provisions in your car insurance for no-claims bonus?

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