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Read Your Policy!
Motor insurers usually issue three documents.
The Certificate of Insurance – this is evidence of insurance as required by the Road Traffic Act.
A Cover Note – acts as a temporary policy and also as a temporary certificate of insurance for the purposes of the Road Traffic Act.
The Policy Document – sets out in full the terms and conditions of your policy.
You should read your policy carefully – there is no small print or difficult language in modern insurance policy booklets.
The Road Traffic Act requires all motorists to be insured against their liability for injuries to others (including passengers) and for damage to other people’s property resulting from use of a vehicle on a road. It is an offence to drive your car or allow others to drive it without insurance.
How Premiums are Calculated
Factors taken into account in costing your insurance include who will drive, the type of car, where it is kept, the uses to which it is put, and the type of cover required.
When buying motor insurance you must give the insurer full information.
The policy may only cover driving by yourself or specified people, or it may allow driving by any qualified person with your permission, possibly over a certain age limit. Your insurers will want to know about anyone who is likely to drive – particularly their age, experience, driving record and occupation.
Family cars with moderate repair costs are cheaper to insure than large or powerful cars which can be expensive to repair.
Each model is given an insurance group rating. This system is described later in this Information Sheet.
Older cars often attract discounts from comprehensive insurance premiums.
Insurance claims are more frequent in urban areas so motorists in cities usually pay more for their insurance than those who live in the country. The place where the car is kept is a rating factor, so tell your insurers if the car is not kept at your home address.
Your policy and certificate set out the uses for which your car is insured. For example, if you or any authorised driver want to use your car in connection with work, make sure that your policy covers this.
Driving Other Cars
Some policies cover the policyholder in person while driving a car which belongs to someone else.
However, cover will be limited to third party only, even if you have a comprehensive policy. Accidental damage to the borrowed car will not be covered by your insurance.
Make sure you have the car owner’s permission to drive it and that they have arranged comprehensive insurance to cover you as a driver under their policy. If they have done this, then accidental damage claims to their car, while you are driving, will be met by their policy.
Similarly, before letting someone else drive your car make sure your policy does not have a restriction on who may drive it.
Drinking and Driving
Drink driving convictions are taken very seriously by insurers. Convicted drivers returning to the roads may face difficulty in obtaining insurance and will certainly have to pay premium increases. The level of cover may be reduced – for example from comprehensive down to third party fire and theft. These higher premiums and cover restrictions can well last for a number of years.
All motor insurers have agreed that if your passengers contribute towards your running costs your insurance cover will not be affected, as long as lifts are given in a vehicle seating eight passengers or less. This agreement does not apply if you make a profit from payments received or if carrying passengers is your business.
Changing Your Car
You must tell your insurers if you change your car. A premium adjustment may be necessary and you will probably need a new certificate.
No Claims Discount
Policyholders with a claim free (not blame free) record normally qualify for a premium discount. Scales do vary but usually range from 30% for one claim free year up to 60% or more after four or five years.
“Protected Discount” policies are often available for motorists with maximum discount. For an extra premium, a number of claims are allowed without affecting the discount. Typically two claims are allowed in a three to five year period.
All UK motor policies provide the minimum cover required by law in other European Union countries or the minimum cover required by UK law if that is greater. This cover does not automatically include theft or damage to your car and it may not completely cover your liability to other people.
If you tell your insurers in advance, they can extend your UK level of cover to most holiday destinations.
Your insurers can also supply a Green Card. This is recognised internationally as evidence that you have insurance which meets local law.
The further information regarding motoring abroad is covered in detail under the heading ‘Driving Abroad‘
Look After Your Car
All insurance policies require you to make sure your car is in a roadworthy condition. If you don’t, you may find that your claim will not be paid.
From time to time vehicles may be subject to a manufacturer’s recall to address a possible safety concern. You should check with your local dealer or vehicle manufacturer to see if your vehicle may be affected.
Tell Your Insurer
You must tell your insurer of any changes in the details given on your proposal form such as address, occupation, type of car and motoring convictions including fixed penalties.
Remember – not only is it an offence under the Road Traffic Act to make a false statement or withhold information for the purposes of obtaining a certificate of motor insurance, but it may also invalidate your policy.
Two thirds of private motorists have comprehensive insurance. Most of the remainder choose third party fire and theft, with a small proportion taking out more limited forms of cover.
Third Party Fire and Theft
As previous plus
As above and previous plus
The Group Rating System
Insurance companies put car models into a varying number of groups, these could be 20, 30 or even 50. This means that each model of car can be accurately banded with cars of similar characteristics.
There can be a significant spread of groups within a particular model range.
How the System Works
Nearly three quarters of all money paid out in motor insurance claims goes on repairing cars. The cost of spare parts and the times taken by repairers are therefore major factors in pricing motor insurance.
The factors used to calculate group ratings are:
Recommended Group Ratings
The group ratings determined by the Association of British Insurers are recommendations only. Individual insurance companies, depending on their own experience, may vary from these recommendations.
Buying a Car
Motorists planning to buy a new car should check, in motoring magazines, the insurance group rating of the exact model they have in mind. The higher the group number the more will be the premium.
How to Beat the Car Thief
The financial loss of a stolen car is bad enough and although insurance will compensate for this, nothing can help with the shock and inconvenience.
Walk around any car park. You’ll see cars with windows open, ignition keys in the lock, sun roofs open, valuable property and clothing on display on the rear seat.
Be sensible. Follow the checklist below every time you leave your car.
Take Care of Your Property
Remember – if you are careless when leaving your car then your claim for theft may not be paid at all. Your insurance policy requires you to take care of your property at all times.
Have all the windows etched with the registration number of your car. This deters car thieves.
Many insurers allow a special premium discount if your car has a professionally-fitted alarm/ immobiliser system. The Motor Insurance Repair Research Centre checks on vehicle security devices to see if they comply with the criteria of the Insurance Industry Vehicle Security Scheme. The list of those products that have passed is used by insurers as a basis for premium discounts and required security. Ask your insurer what systems they approve or require. They may also require the system to be fitted by a member of the independent Vehicle Security Installation Board. Your insurer can advise you about this.
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If you are unhappy with our service, we have a complaints procedure, details of which are available on request. You may be able to refer a complaint to the Financial Ombudsman Service (FOS) if you are unhappy with how we have dealt with your complaint. The FOS website is www.financial-ombudsman.org.uk
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