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Explanation of common driving insurance terms

Let's face it, insurance is a dirty word and one that strikes fear and apprehension in the hearts of many young drivers and their parents purely and simply because of two main facts:

1. You MUST have insurance to drive. Without it you are committing a crime and if you get caught (and remember that the police can access most of the information on most cars and whether or not they are taxed with just a quick check) you will not be only fined around £ 200, but will lose that hard-earned license.

2. Insurance is expensive. Especially if you are a man. Women statistically have a safer driving record, so right now insurance is cheaper. However, in December 2012, after European courts' gender discrimination rulings, insurance companies will not be able to charge different rates based on gender. So insurance for girls will definitely increase - but the question is, will it go down for boys?

If you are learning to think about how to find the best insurance, this is probably the last thing you want to think about. But you should - if only to start saving! It should also influence the type of car you dream of owning.

For a first-time driver, understanding the terms used by insurance companies can be confusing. This is a useful glossary of insurance terms that will help you think about the insurance you will need for your first car.

Insurance groups

Insurance groups vary from 1 to 50. The lower the group, the lower the insurance. The larger the group, the more your insurance will cost. There is a good guide online at Parkers that will show you which cars are in which group and where you can check which group of cars you have taken a look at.

Insurance premium

This is the amount you will pay for your insurance. You can normally pay for insurance either in one installment per year or in monthly installments. While the monthly payment may be more affordable for your budget, it will cost you more over the course of the year.

Full insurance

While you should read the short notice of your insurance terms very carefully, in general, comprehensive insurance covers both the car you drive and any vehicle, property, or person you damage. Comprehensive insurance is generally more expensive, although some insurance companies only offer this option. If you are hit by an uninsured driver, your insurance will cover repairs to your vehicle.

Third Party Fire and Theft

Liability is basic insurance - the car you drive isn't covered, but anything you hit is. Fire and theft are often included, which means you're covered if your car catches fire or is stolen. You must have at least liability insurance.


If you have or cause an accident and your insurance company is involved in paying for the damage to be repaired, or in any legal action, then you will have made a claim. Sometimes if you only caused minor damage to your car or someone else's car. If someone, for example, hits your car and a light is broken, they will probably offer to pay for the damage to be repaired without going through an insurance company to avoid making a claim that will affect their no-claims bonus. claim. If the damage is greater, it cannot be avoided.

No Claim Bonus (NCB)

As a new driver, you will not get any bonus without a claim. You get this for every year you drive without having to make a claim on your insurance. You should aim to make no claims at all, and therefore increase your bonus to the maximum amount. It can be something like 70% off your bonus after 7 years of driving without a claim, so creating your bonus will be worth a lot of money. If you make a claim, you will lose all or part of your NCB depending on the number of years you have accumulated.

Protected NCB

When you have accumulated a lot of claim free bonuses, you can pay a little more each year, which means you can make one or two claims (depending on the insurance company) without affecting your no claims bonus. Although the NCB is not affected, you will find that your insurance will increase the following year following an accident. So it's worth considering exactly how much that extra protection will cost to decide if it's worth it. In your first few years of driving, it probably isn't worth it.

Named pilot

If the insurance is in your name, you will be the designated driver. No one else will be able to drive your car unless you add them as named drivers and declare their driving history, age and driving experience. Having older people, like your parents, as named drivers on your policy can lower your insurance premium.

You might be a named driver on your parents' car if they drive a car that is in a weak insurance group, but you need to check very carefully to make sure their insurance will allow you to build up a premium of no. -claim on your own.

It is illegal for your parents to insure the car of which you are the main or sole driver in order to reduce the insurance premium. In this case, you may find that if you need to make a claim the insurance company will not pay and you could be sued for several thousand pounds, plus penalty points for effectively driving without insurance.

Some insurance policies, primarily for older and more experienced drivers, allow them to drive your car under their own insurance without having to be named on your policy. It is your responsibility to make sure that anyone you let drive your car is properly insured to drive it, so make sure they have checked their insurance documentation and ask to see a copy if you or them , have doubts as to whether they are insured.

Smartbox, Coverbox etc.

Most accidents occur to new drivers aged 17-24, hence the high insurance premiums. Some insurance companies have come up with an idea to help new drivers stay safe on the road and offer them lower insurance premiums. The insurance company will pay to have a box installed in your car out of sight. The box usually has various features which can include GPS and a gyroscope, and will measure things like your adherence to speed limits, how smoothly you accelerate, brake and take turns, and what time of day you drive. (between 11 p.m. and 6 a.m. are considered the most dangerous). There is usually an online dashboard to show how well you drive, and sometimes a premium reduction if you drive well!

The last thing a teenager wants to do after they've passed their test and shown their instructor to the car door is to be constantly watched over their driving. But parents will appreciate that anything that makes a new driver safer on the road is worth it. And really, unless you go crazy and behave dangerously on the road, the smart box won't have to affect your driving at all!

Pass Plus

Another way to lower your insurance premium is to take Pass Plus - many companies will not only offer you a reduction now, but every year after that when you renew your insurance.

Do I always have my insurance documents with me?

While it can be convenient to keep your documents in your car, if your car is stolen, so are your insurance details. It is helpful to keep a note of your insurance company and your policy number in your glove box.

If the police ask for your insurance and license and you do not have them with you, you will be asked to present them to a police station within seven days. Make sure you do this - if you don't show them on time, the police can sue you.

So what do you do if you have an accident?

Accidents do happen - in bad weather you could hit a patch of ice; a car can exit a bend without looking. You can swerve to avoid a dog or a cat. Regardless of your good driver, it is possible that an accident could happen to you. Never drive without insurance because you can never know when you will need to claim or be claimed!

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