Car Insurance Explained: What You Need to Know | GO Vauxhall

Car Insurance Explained: What You Need to Know

Car insurance can be a subject that touches a nerve for many of us. We often complain of rising premiums, while young and new drivers regularly face high insurance costs to protect their first car.

But, the fact is – we need car insurance. Put simply, it protects us in the case of an accident or theft of a vehicle. And, as it’s probably the biggest single purchase apart from your home, it makes sense to ensure you have the right cover.

What’s more, not having car insurance is against the law.​

According to the Motor Insurer’s Bureau (MIB), there are currently around 1 million uninsured drivers on UK roads. To put that into perspective, this equates to one in every 38 cars you pass each day. And you won’t get away with not having insurance; the authorities have successfully removed 145,000 uninsured cars from our roads in 2016, and they will continue to target uninsured drivers for many years to come.

Here at GO Vauxhall, we want you to know what you need to do to protect yourself and your car, as well as adhere to the law of the land.

Types of car insurance:

Ever wondered what all the different types of car insurance are? There are three levels of car insurance cover in the UK – third party, fully comprehensive and third party, fire and theft.

Third party – the most basic level of cover – covers other people, but not you. Essentially, if you injure someone or damage their property your insurance will cover the cost, but if your own car is damaged or stolen you will have to pay for the loss.

Third party, fire and theft – this is like third party in that it covers other people and you still have to cover the cost if your car is damaged. The difference is that the insurance will cover the cost of repairs or replacement if your car is stolen or damaged by fire.

Fully comprehensive – the highest level of cover – does everything the previous two levels of cover do, but is also the only one that will protect you if you damage your car, even if the accident was your fault.

The level of car insurance premium paid is based on a number of factors taken into account by the insurance company. It will include your record as a driver, your personal circumstances and the car itself.

For example, if you're an older driver with years of experience, living in a relatively safe area and driving a sensible car, your premium will be relatively cheap. However, if you're a young, inexperienced driver with a high-performance car, the cost of your cover will be much higher.


Insurers expect that drivers will commit to paying a set amount against any claim. This is called the ‘excess’ and is arranged when the policy is generated. It is the same amount no matter the size of any subsequent claim.

In some cases, drivers can increase the voluntary excess amount which can help reduce the size of the car insurance premium to be paid. In addition, the amount of excess will vary depending on the type of claim, for example fire, theft, accidental damage and windscreens.

No claims bonus:

Insurers like it when drivers do not claim and are happy to provide a discount on insurance premiums if you do not make a claim on a policy.

The no claims bonus grows year-on-year if no claims are made, with a 30% discount after one year and up to 65% or more after five claim-free years.

If you do have an accident, usually you will lose two years’ worth of no claims discount, and your premium will also increase. If you have more than one accident in a year, you could end up losing the entire no claims bonus that has been built up. This could make your car insurance costs rise dramatically.

A number of car insurers allow drivers to protect their no claims bonus with an additional payment. You can then make a claim without it affecting the no claims discount that has been accrued over a number of years. This can vary depending on the insurer, so don’t forget to check the terms and conditions.

Some handy tips:

Here are some tips to help keep the cost of car insurance down when it comes to taking out your first policy, or if you are simply looking to renew.

  • Don’t always assume third party cover is the cheapest form.
  • Tweaking your job description can reduce the premium cost – check out this helpful tool to see how much cheaper you can get insurance by changing your job title:
  • Never just renew your insurance automatically with the same insurer – look at the market as staying loyal can be expensive.
  • Remember you can switch insurance mid-year, you do not have to wait until renewal time.
  • Not all insurers are included on popular cost comparison websites, many companies offer their car insurance products directly to consumers – so make sure you do your research before committing.
  • Consider black box insurance. A box is fitted to the vehicle to monitor drive behaviour, and good drivers are rewarded with cheaper cover, while bad driving can result in the loss of any discounts.
  • Some insurance companies will give money off a policy if you have undertaken a Driving Standards Agency’s Pass Plus advanced driving course.

And that’s it! All in all, make sure you do your research and choose the cover that’s right for you.

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