CAR INSURANCE EXCESS – WHAT IS IT?
Car Insurance excess is the amount of money you will have to pay in the event of a Car Insurance claim e.g. if your excess is €100, then you will have to pay the initial €100 of any claim. The excess makes up the first part of a claim, so if the claim was for €500, you would pay the first €100 and the insurer the remaining €400.
COMPULSORY EXCESS AND VOLUNTARY EXCESS
Some Car Insurance policies have compulsory excess that must be paid, whereas voluntary excess only applies if the driver has chosen to have it added to their policy. Compulsory excess is most common with young drivers, with many drivers under 21 facing excesses of up to €500. This tends to come down with age and driver’s aged 25+ will often not face any compulsory excess. Voluntary excess is normally used to help reduce the insurance premium to gain cheaper Car Insurance. The downfall of this is that in the event of a claim the voluntary excess plus the compulsory excess can work out quite expensive.
CAR INSURANCE EXCESS EXAMPLE
Car Value: €1000
Driver Age: 19
Compulsory Excess: €250
Voluntary Excess: €250
If this driver crashed or had their vehicle stolen and it was written off as a total loss, they would be faced with a total excess of €500. As a result their insurance company would only have to pay out €500. In this example the driver would effectively end up with nothing. The €500 paid out by the insurance company would be cancelled out by the €500 they have to pay the insurance company. As a result they end up with no money and no car. It is always worth calculating what would happen in the event of a claim and whether it is worth having a high voluntary excess on a low valued car. Take a look at how you can get cheaper Car Insurance.
HOW IS YOUR CAR INSURANCE PREMIUM CALCULATED?
Here is a list of the main factors that are used to calculate your Car Insurance premium:
Age – Younger drivers pay the most, along with new drivers.
Gender – Females get cheaper Car Insurance than men.
Type of Insurance Cover Required – Fully Comprehensive is the most expensive and third party is the cheapest.
Job – Stressful jobs such as retail management can increase insurance premiums.
Where the vehicle is kept overnight – In the garage, on the driveway or street.
Annual Mileage – The more mileage you do the more it costs.
No Claims Bonus – The more NCB you have the cheaper your insurance costs will be.
WHO DECIDES HOW MUCH CAR INSURANCE PREMIUMS ARE?
Insurance underwriters calculate insurance quotes. Their job is to perform a risk assessment and give a competitive quote that will make the insurance company money in the long run. Most insurance companies have set guidelines and price plans which produce quotes automatically, this is how online insurance companies provide quotes so fast.
POINTS AND EXISTING CLAIMS
Having points on your license will also increase your premium, although with the influx of speed cameras some insurers are less severe on premium hikes. Existing claims also cost extra as it makes you a higher risk to your insurance company.
NO CLAIMS BONUS (NCB) AND NO CLAIMS DISCOUNT (NCD) WHAT IS IT NCB / NCD?
No claims bonus (NCB) is also known as no claims discount (NCD). For every year of driving without making an insurance claim, you are awarded one years no claims bonus. Say for example you have been driving for four years with your own insurance policy and haven’t made a single claim, then you will have four years no claims bonus.
HOW DOES IT AFFECT CAR INSURANCE?
By acquiring NCB you are proving that you are a safe and low risk driver. The more NCB you have the cheaper your insurance quote will be. Some insurance companies class 9 years NCB as the maximum as anything over is almost irrelevant.
WHAT IS PROTECTED NO CLAIMS?
Protected no claims is usually only available to drivers with a minimum of 4 years no claims bonus (NCB). If protected no claims is taken out, in the event of a claim the drivers NCB will remain in tact. Most insurers allow 1 or 2 claims per year although this is worth checking with the individual insurance company. It is worth noting that although your NCB will not be effected, your renewal premium may still increase as you would have made a claim.
WHAT HAPPENS IF I CRASH WITHOUT PROTECTED NO CLAIMS?
Most insurers have some type of scheme whereby you will lose a certain amount of your NCB, although not all of it. For example, if you have 5 years no claims and you make a claim with your insurer, you may lose 2 or 3 years or all no claims bonus at renewal time. If you only have 1 or 2 years NCB, then in the event of a claim you will probably lose all of it.
CAN I BUILD NO CLAIMS AS A NAMED DRIVER?
The only way to gain no claims bonus is to have your own insurance policy and to not make a claim with your insurer. Being a named driver on someone else’s policy could gain a NCB depending on the insurance company, but will prove driving experience.
HOW LONG IS NO CLAIMS VALID FOR?
Most insurers require that your current no claims certificate must have been issued in the last two to three years. If you have 5 years no claims, and then don’t drive for 3 or 4 years, when you start driving again it is likely you won’t have any NCB.
WHAT ABOUT PEOPLE WITH COMPANY CARS?
Some insurers will count claim free company car driving years as no claims bonus. Often you will need to prove it via a letter from your boss that you haven’t had an accident and then your insurance company will count this as no claims bonus.
DRIVING OTHER CARS – DOES MY CAR INSURANCE COVER ME TO DRIVE OTHER CARS?
Some Car Insurance companies provide third party cover to drive other vehicles as well as your own car. Some insurers have withdrawn all support for this cover.
I HAVE A FULLY COMPREHENSIVE CAR INSURANCE POLICY SO I CAN DRIVE ANY CAR?
This is a common misconception with regards to Car Insurance. Unless the small print of your Car Insurance states you are covered to drive other cars, you are not. If you are unsure phone your insurer to clarify the situation.
WHAT ABOUT TEST DRIVES?
This is always a problem with regards to insurance. Some test drives are carried out with no mention of insurance, although many main dealers require proof of insurance before hand. You should always check you are insured before carrying out a test drive as it can lead to hefty fines and points if you are caught driving without insurance. Some garages will have an insurance policy that covers test drives, however, private sales are more likely to pose a problem unless your insurance policy covers you to drive other cars.
WHAT TO DO IF YOU ARE INVOLVED IN AN ACCIDENT WITH AN UNINSURED DRIVER?
If you are involved in an accident with an uninsured driver, unfortunately, they are likely to drive off unless the damage prevents them. However, in all cases every attempt should be made to note the number plate, car make/model, contact details (if the person stops) and a description (if they drive off) of the person driving. As soon as you discover the other driver is uninsured you should contact the police immediately.
WILL I LOSE MY NO CLAIMS BONUS?
This all depends on the individual insurance company and what the small print of your policy says. We recommend you ask your insurer before taking out a policy with them. In some cases legal cover can be used to sue an uninsured driver to reclaim all costs to your insurance company – in this case you will normally keep your NCB. Some insurers take the view that a claim is a claim so you will lose your no claims bonus no matter what. If the damage is only minor it may work out cheaper to pay for it yourself, and use your insurance legal protection to reclaim costs from the uninsured driver.
IS THERE A COMPENSATION SYSTEM FOR VICTIMS OF UNINSURED DRIVERS?
The Motor Insurers Bureau is a specialist organization setup to help deal with uninsured drivers. Every insurer in the Ireland pays a certain amount to help compensate victims.
CAR INSURANCE QUOTE FORM GUIDE
Below you will find a quick guide to insurance quote forms with each section explained as to why it is collected. Some of the popular questions found on Car Insurance quote forms are also explained.
Title
This is normally only used so the insurer knows how to address you, however some insurers use this field instead of asking for your gender.
Gender
As you are probably aware woman are statistically less expensive when they crash than men. This field will allow the insurer to charge you anything up to a few hundred pounds extra if you’re a male.
Name
This will not affect the final premium
Address (Post Code)
Your address, can make a massive difference to the final insurance premium. Every Area is assigned an insurance group.
Contact Number / Email Address
Used to contact you if you take out a policy, or to harass you if you don’t 🙂
Car Details
Most insurers will only ask for your cars number plate from which they can gather all the other details such as make, model, year and engine size. The most important factor about the car is the insurance group it is assigned.
Where is your car kept overnight?
As you’d expect if its kept in the garage your premium will often be slightly cheaper. There isn’t normally much difference between keeping a car on the drive or on the street.
HAVE YOU HAD ANY CLAIMS WITHIN THE LAST 5 YEARS (REGARDLESS OF FAULT)?
If you have made an insurance claim within the last 5 years, regardless of who’s fault it was, it is likely this will increase your premium. The insurer will normally ask for details of the claim such as how much it cost.
ANNUAL MILEAGE
You should always try and be as accurate as possible when answering this question. If you underestimate and then make a claim, it is possible your policy may be voided. It is worth noting that the mileage only applies to you, so if someone else drives your car this shouldn’t be counted. With most insurers the lower the mileage the cheaper the premium will be. Insurance companies will sometimes only offer-limited mileage polices to people who drive less than 5000 miles a year.
ADDITIONAL DRIVERS
In most cases adding an additional driver will either increase of have no effect on the insurance premium. However, for young drivers adding an older female can sometimes reduce the premium.