What's really covered in your insurance policy?

What's really covered in your home insurance

When it comes to choosing a motor insurance policy, it's worth taking time to carefully consider the options. If you're unfortunate enough to be in an accident, you can find yourself facing bills for all sorts of things: not just damage to other people's vehicles, but compensation for their injuries and time off work. You might also be out of pocket if you are injured or your vehicle or property is damaged. Choosing an insurance policy is about deciding what kind of protection is right for you. 

There are three main types of motor insurance:

Third party insurance

This is the most basic form of cover, which you must have to be able to drive legally. It provides cover for costs that arise from injury caused by you to others and damage to their property. 

Third party fire and theft

In addition to cover for damage or injury to other people and their property, Third party fire and theft cover protects you from the cost of your vehicle being damaged, stolen or destroyed by fire. 

Comprehensive

This type of policy gives you the highest level of protection. Comprehensive policies will cover you for damage and injury to third parties, theft, fire or damage to your own vehicle. This type of policy also covers injury to you and damage to your vehicle. Depending on the policy, you may have further cover such as provision of a courtesy car or cover for replacing your vehicle's contents. When comparing different comprehensive policies it is important to be clear about what is covered. 

Don't get caught out by the wrong policy

All too often drivers are caught out because they have a poor understanding of what is covered by an insurance policy. For example, you might think you are covered to drive abroad, but many policies either do not provide this cover or limit the range of countries in which you can drive. The best way to avoid this is to make a careful plan of what you want your insurance to cover, before you get any quotes. Think through some worst-case scenarios about what could happen and decide what would be right for you. 

Damage and injury to others

Cover for damage to other people and their property shouldn't be a concern. All policies will provide cover for this type of loss. 

How much would theft, fire or damage cost you?

The next thing to consider is damage to your vehicle and its contents. What is your vehicle worth? Do you often travel with valuable belongings? You will need to balance the cost of replacing your vehicle and its contents against the cost of the insurance. If you drive a vehicle of a low value, it might not be worth it. On the other hand, if you have invested in a more expensive car, or often travel with valuables such as jewellery, laptops or sat navs, a third party, fire and theft or comprehensive policy will likely be right for you. 

Your individual circumstances

Finally, take time to think through whether you need further cover under your policy. Maybe you have a holiday home in France – do you need cover to drive abroad? Perhaps you often visit grandchildren and take them out in your son or daughter's family car – you'll need specific cover for this. You might also want to opt for courtesy car cover, and think through your options if a motor accident affects your ability to work.

Legal expenses insurance

Many insurers offer legal cover in the event that you need to bring a claim against someone, or defend a claim they make against you. For example, you might be in a collision and incur loss, which is not fully covered by your insurance policy. This might include loss of earnings if you have to take time off work, medical expenses and compensation for injury. Legal expenses insurance can help you recover these uninsured losses by covering legal fees you would otherwise pay to bring a claim. Legal expenses insurance will also often cover your excess if you need to make a non-fault claim. 

Being clear about cost

Insurance companies use complicated formulae to work out the cost of particular policies for particular people; sometimes the results are surprising! Contrary to what you might expect, it can be cheaper to opt for a higher level of cover. For example, comprehensive policies are sometimes cheaper than third party cover alone. It is certainly worth checking before you take out a policy. 

Updating your details

It's very important to let your insurer know if your circumstances change. If you do not, it could mean you will not be covered in the event of a claim. The details your insurer needs to know about will be listed in your policy. They typically include change of name, address and job; major alterations to your vehicle or registration number; incurring a fixed penalty notice or being convicted of a motoring offence and changing the drivers of the vehicle.

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