Scottish Driving School |Insurance terms

Insurance - rules

There is a lot of data written about car insurance which can seem complicated at first until you know a few basic points. I have written these notes to help you understand some of the more common terminology a little more clearly.
First of all you need to understand that you need to have your car insured by law if you intend to drive it on the public roads. This is for two main reasons

Should you run into a pedestrian or another vehicle (moving or parked) then the insurance company you are with can pay out compensation - this is a minimal insurance requirement for you called 3rd party insurance.
Should you damage your car then you could claim damages through your insurance company - this is called Fully Comprehensive insurance.

Insurance - types

There are many different types of insurance you can have for cars, here are the ones that concern you as a new driver.

3rd party insurance-
This is the minimum type of insurance you need to have by law. What it means is if you are involved in an accident, the person you hit (vehicle, goods, or person themselves) can claim money from your insurance company. You cannot claim damage costs to your car if it is your fault.

3rd party fire and theft - insurance
This covers your costs as shown in item 1 plus if your car catches fire, or is stolen, then you can recover some of the costs involved in replacing or repairing your car.

Comprehensive - insurance
This means that you are covered for items 1 and 2, plus you could have your car repaired at the insurers cost even if the accident was your fault.

The first type of insurance mentioned i.e. 3rd party does not cover you for repairing your own car.

Insurance - price

Some conditions that influence your insurance price

Your age
Your driving record
Where you live
Is your car garaged or off the road at night
Your car make and model
Does your car have an immobiliser device fitted
Have you passed your driving test
Do you smoke
Are you male or female? (males under the age of 25 pay more than females)
Your job
Do you use your car to go to work
Do you use your car for your work

Insurance - What is a no claim bonus?

The no claims bonus discount
You would normally get a 30% discount on your yearly premium if you don't make a claim within that year. Your Pass Plus* discount could cover your first years premium. A no claims insurance bonus increases to 65% after four or five years. Not all companies are the same though, you should shop around. Some may go up to a 70% maximum.

Insurance companies now offer the opportunity for you to pay more on your annual premium to insure you against loss of your no claim bonus. The different insurance companies have different rules, so check before you buy.

Sometimes you are allowed to make one claim every 3 years without it affecting your bonus. Protecting your bonus will not stop your insurer from increasing your renewal premium following a claim. Your no claim bonus though will be unaffected.

Making a claim does not necessarily mean you lose your bonus. It depends whether the claim is your fault or the other persons fault.

Just because the accident was not your fault, still doesn't mean you are in the clear. If the insurance company cannot recover it's costs then you seem to lose out.

Example; if you are driving along a country road and a wild deer runs into your car, you obviously cannot claim off the deer. So who pays? Most of the time it would be you, one way or another. Either directly to a garage to fix your car or by the loss of your no claim bonus and possibly an increase in your next years premium. Either way you could be out of pocket on a non-fault accident of this type.

Should another driver be involved in your accident and it can be shown without doubt that the other driver was to blame, both insurers would often settle a claim on a 50:50 or 80:20 basis, if you were not wearing your seatbelt or the full costs if you were 100 percent blameless. A lot of insurance companies, make you lose the equivalent of two years off your no-claim bonus if the accident was your fault.

Scottish intensive driving courses Pass Plus*Scottish Intensive Driving Courses can be booked for Pass Plus Training

Insurance - if you are involved in an accident

If you have an accident that causes damage or injury to any other person, vehicle, animal or property, you must give both your own and the vehicle owner's name and address, along with the registration number of the vehicle, to anyone having reasonable grounds for requiring them. If you don't give your details then you should report the accident to the police as soon as possible within 24 hours. You must also report the accident to your insurer, even if you're not intending to make a claim.

If you're involved in an accident with an uninsured motorist

Any accident with an uninsured driver should be reported to the police. You should also report any accident to your insurer, who'll advise you further as regards any claim. Additionally, the Motor Insurers' Bureau (MIB) ensures that compensation is available to the innocent victims of uninsured drivers or hit and run (untraced) drivers.

Motor Insurers BureauCheck out the Motor Insurance DataBase

United Kingdom (UK) motor insurance and driving overseas

All UK policies provide the minimum cover required by law in other European Union (EU) countries or the minimum cover required by UK law if that is greater. This cover doesn't automatically include theft or damage to your car.

Most people want the same protection they have in the UK when travelling abroad, for example comprehensive or third party, fire and theft. This could, in addition to the legal minimum of third party liability cover, include accidental damage to, or theft of or from, your own vehicle, depending on the policy cover.

A number of insurers automatically provide this extended cover for a specified period and often without additional charge. It's important, however, that you check with your insurer or insurance adviser before you go abroad.

The Green Card insurance system and driving overseas

Outside of the EU, a green card provides proof that your domestic motor insurance policy covers the minimum legal requirements in the country being visited.

Green card systemCheck out the Green Card system for insurance when travelling abroad

Motor insurance database

All insurers must provide details of your motor insurance policy to the MID. It’s no longer enough just to be insured, all vehicles must be listed on the MID.

Motor insurance databaseCheck out the Motor Insurance DataBase
Ref: car insurance info. from direct gov.Direct Gov Motor Insurance explained in detail

What to do if your vehicle is scrapped or written off

You must take your vehicle to an authorised treatment facility (ATF) if it needs to be scrapped. If the vehicle is to be written off by your insurance company, they may take the vehicle in return for a total loss payment.

What to do if your vehicle is 'written off'Direct Gov. change your car registration details
Check your vehicle is insuredIs your vehicle insured? You can check the vehicle registration DataBase here.