The cost of insurance
Insurance can be expensive, and the biggest factors that influence the premium are age, gender and where you live. Of course, these are things you cannot easily alter. However, there are other factors influencing the cost that you can have some control over. For instance, some insurance companies offer reductions on your premium if you undertake further driver training after you have passed your test. Consider a short course like Pass Plus, or find out about becoming an advanced driver with IAM or RoSPA. Not only can it save you money on your insurance it will also help you to be become a more competent and safer driver and when you consider that 1 in 4 new drivers crash within 6 months of passing their test this has to be a good thing.
What is black box insurance?
Another cost saving measure is using black box car insurance – also known as telematics insurance – involves your insurer fitting a telematics device to your car to measure how safely you drive. Black box insurance can be a great way for safe drivers to save money on their car insurance, because you can be treated as an individual when it comes to working out your renewal premiums. Some black box insurers will also offer safe driving rewards during the policy year, whether that is a discount on your premium or additional miles (if you choose a limited mileage policy).
When you come to renew your policy, your premium will usually take into account how well you have driven over the year, so you have a better chance of getting a significant discount if you’ve driven safely.
Check out this video from black box insurer Insurethebox, showing what happens when the box is fitted to your car: http://vimeo.com/41549290
What cover should I get?
There are three levels of cover available, although most people - about two thirds of private motorists - have what's known as comprehensive insurance.
This is the most basic insurance and covers anyone you might injure or whose property you might damage. You are not covered for damage to your car or injury to yourself. Third party insurance can actually work out to be more expensive than fully comprehensive cover so it is worthwhile investigating further.
Third Party, Fire and Theft (TPFT)
This is the same as third party, but also covers you for fire or theft of your car.
As the name implies fully comprehensive is the best. It covers any damage you may do to other people and their property, and covers you and your car for accidents, fire, theft, malicious damage and injury.
What is no-claims bonus?
A no-claims bonus is the discount given by an insurer if you do not claim on their policy during the period of car insurance. This starts around 15% after one year and climbs to 60% after six or more claim-free years.
What is the impact on insurance after a collision?
If you are not at fault, you shoud retain your no claims bonus. If you are at fault, you will lose two or more years of your no-claims bonus.
Can I get by without insurance?
No. The law requires you to have insurance. Being involved in a collision while driving without insurance may result in criminal prosecution. Protect yourself and others by making sure you are adequately covered.
Fronting is the term used when a young person has a car registered to their own name but insures the vehicle with their parent as the main driver and themselves as a named driver to save money. The premium is therefore lower as the insurers think an experienced driver is the main car user. However, if the insurer discovers what amounts to fraud, the policy is invalidated and the young driver is left much worse off. They are liable for potentially thousands of pounds of bills as well as criminal prosecution. The driver will then be seen to be driving without insurance and liable for prosecution through the courts, with the outcome being a hefty fine and 6 points, as well as the costs of the original claim.
What happens is an insurance company finds out about fronting?
Insurers take fronting extremely seriously and may have developed in-depth investigative procedures to alert them to possible fronting cases when claims are made. Both the young driver and the person fronting for them could suffer serious consequences if they are found out. For example:
• The young driver could be taken to court for driving without insurance.
• Being caught could result in licence points, bans and fines.
• The insurance policy could be invalidated, giving cost responsibility back to the drivers.
• The fronting adult could have their own policy for their own vehicle invalidated.
• Both parties may find it harder and more expensive to get car insurance in the future.
Many people simply take a fronting route because they do not realise that this is illegal. They are just looking for ways to cut extremely high young driver insurance costs. Rather than take this risk, they may be better looking at other legal ways of saving money on this kind of insurance.