It is compulsory for all owners of cars and vehicles to purchase motor insurance. Most companies offer either Third-party or Comprehensive motor insurance policies. The premium they charge is based on several risk factors.
Third party motor insurance covers the policyholder for liability claims from the other driver, or any other party who may be involved in the accident. The policy can also sometimes include protection against fire and theft of your own vehicle, but this needs to be clarified at the outset. On the otherhand, comprehensive motor insurance gives the policyholder more peace of mind as it may cover the entire cost of any repairs their vehicle requires, or, indeed, the purchase of a brand new one if the accident has caused irreparable damage to the policyholder's current vehicle.
There are many risk factors that generally affect the composition of the policyholder's premium. Young, inexperienced drivers are often heavily penalised because they are more likely to drive at excessive speeds and be involved in road traffic accidents, as well as being considered more likely to drive under the influence of drink or drugs. More recently female drivers have been considered the safest people behind the wheel. Many different companies consider themselves as specialists in certain areas and women can certainly find female orientated policies that reward careful driving. Other factors can include where you live, whether you have garage facilities and if your vehicle has some kind of anti-theft device, such as an immobiliser, fitted.
All companies offer drivers the chance to reduce their premiums by qualifying for a no-claims bonus. This is a discount applied at the renewal of a policy if there have been no claims made in the previous year. After a number of years drivers can find their premiums reduced by as much as 65% if they remain claim-free. This no-claims bonus acts as a reward for careful drivers so they aren't subsidising those drivers who make frequent claims on their policies.
