Frequently Asked Questions in Insurance

To All Forum Members,

If you have any comments about them or need further clarification on any of the areas discussed, please do not hesitate to PM me or simply reply to the thread.

Many Thanks

Dan Clark
Adrian Flux Insurance Services

Q. What is the difference between third party only, third party fire and theft and fully comprehensive insurance?

A. In the UK the lowest cover of insurance that is legally required by a motorist is third party only (TPO) cover. You are covered to drive/ride on the roads and as the name suggests a third party is covered against any accident which is your fault. These policies usually have no excess written into the agreement. TPO cover isn't usually the cheapest type of cover anymore as insurance companies have less schemes for TPO and therefore smaller markets for TPO, with the exception of bike policies. TPO insurance for bikes is still competitive and usually the cheapest. This type of cover gives you the lowest protection. In the event of an accident which is your fault you will get nothing back, only the third party will be covered. There is also no fire or glass cover.

Third party fire and theft (TPFT) is the next cover up from third party only. It covers you exactly the same as above, but includes fire and theft cover. TPFT cover comes with an excess. In the event of a claim for fire or theft you will have to pay the excess. For example, if your excess is £200, you will have to pay the first £200 towards a claim. So if your car is worth £1000, you would get £800 back from the insurance company. You cannot claim for accidental damage which is your own fault on this type of policy and you do not have glass cover.

Comprehensive cover is the most detailed cover you can buy and is usually the most costly. It includes glass cover that comes with its own excess. You can make a claim on your glass cover without it affecting your no claims bonus (NCB). The policy covers you if you damage your own car, if it is vandalised, stolen or set on fire and it covers any third party costs if you were at fault.

Q. Why when I phone up Adrian Flux do they ask what is the best price I have had so far?

A. A lot of people think that insurance companies add money onto policies because the best price they have had is £200 more. This is not the case and is frowned upon. Here at Adrian Flux we will ask the best price you have had to assess if we have the market to compete. An insurance quote can take between 10-20 minutes and if you've had an unbelievable price which we know we simply cannot compete with we won't waste your time. The main reason that we ask this question is so that we can refer it to the insurance company and see if they can go any cheaper. Most insurance companies use statistics to formulate people's insurance. The insurance companies don't know what prices other insurance companies are charging for insurance. To ensure they are competitive they ask the customers and change their prices accordingly to compete. We like to give you the cheapest price possible.

Q: If I have comprehensive cover on my vehicle, does this mean I am allowed to drive any other car on third party cover?

A: The simple answer is not necessarily, you must always check to see if you have this extra benefit on your policy as most insurers do not offer this if you are under 25. Some insurers do not offer this benefit at all any more, if you drive without insurance you will be liable for costs of any accident and will receive a penalty such as driving with no insurance for this common misconception.

Also on some policies you will be entitled to this benefit even if you are only insured Third Party Fire and Theft. Please note that the car you drive on this benefit must not be owned by you and cannot be a hire/courtesy vehicle.

**Q: What constitutes as a modification? What happens if I don't disclose a modification and have a claim and state it is a factory fitted optional extra, how will my insurance company know? **

A: A modification is a permanent fixture to the vehicle whether it is performance enhancing or not that doesn't come as standard to that particular model of car. This includes the interior as well as the exterior.

If you don't disclose modifications that you have on your vehicle regardless of whether the previous owner fitted them, your insurer could choose to void your insurance in the event of a claim, which will leave you liable for any expenses occurred to a third party. Some insurers may be more lenient and make you pay the additional premium that you would have paid originally then they will cover the claim costs, but beware it is totally up to the insurers discretion and they are not liable to pay out any costs in this situation.

Your insurance company have access to records which enable them to view the standard versions of every make model etc, If you have a modification on your vehicle the insurer will find out.
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Q. What are accelerator bonus policies and why do some companies not accept them?**

A. Some companies offer a ten month accelerator policy as a quick way of getting a no claim bonus however this is not the way it works. You will only get ten months insurance and only ten months no claims bonus which cannot be transferred to a different company as one years no claims bonus when the time for renewal comes up, simply because you do not have a full years no claims record. So you would find that instead of gaining a years no claims bonus you will actually only have ten months no claims bonus. To conclude two ten month policies equals one years no claims bonus.

There is also the added cost involved, when you take out the accelerator policy it is as I have mentioned only a ten month policy so whilst it looks cheaper compared to a twelve month policy you will end up paying more month by month. It can be tempting when you have just passed your test to go for the accelerator policy so you can get your no claims bonus quicker and start seeing a reduction in your insurance prices but it will only cost you time and money in the long term. It is always far better to stick to what the majority of insurers sell, which is a YEAR'S insurance policy with a YEAR'S no claims bonus.

Q. Can I insure my child on my policy?

A. When you are looking round for your first insurance quote on your car it can seem the insurance world is against you as the premium can be quite high. As a result quite often parents will take out the policy in their name and have their child on as a named driver.

This can work against them in several ways. The premium will still be high as it is based on the highest risk driver also they will not be earning any no claims bonus during this time. The insured driver is expected to be the main driver with the child using it occasionally and if it is proved different after an accident it could cause the policy to be void.

Some insurers give no claims bonus for being a named driver. Please note that they are the only companies that will accept this type of no claims bonus. Therefore you are narrowing your market for future years and this will result in you not getting the best available premium.

Adrian Flux have a range of insurers that have specialist schemes for the younger drivers, making it easier for them to get their own policy and start incurring their own no claims bonus.