Car Insurance

Car insurance is a contractual agreement between a vehicle owner and an insurance provider, designed to provide financial protection against losses arising from a road accident. This may include coverage for accidents, theft, natural disasters, and third-party liability.

By paying a premium, the policyholder ensures compensation for damages or injuries sustained in covered events. Car insurance is not only a prudent safeguard but a legal requirement, ensuring that drivers can meet potential financial obligations resulting from vehicular mishaps.

Car insurance is a legal requirement in the UK as stipulated in the Road Traffic Act 1988. Having car insurance provides the registered keeper and other driver’s financial protection in the event of an accident.

You must have car insurance by law, unless your car is registered as off the road. Without insurance, you could incur a fixed penalty of £300 and 6 penalty points. Also in some cases you could get an unlimited fine and disqualified from driving if the case went to court. 

In the UK there are 50 different car insurance groups with 50 being the highest and 1 being the lowest. The lowest car insurance group generally offers the cheapest car insurance premiums.

When a new passenger car is built in the UK it is reviewed and classified by the Group Rating Panel who meet on a monthly basis. The panel is made up of members from the Association of British Insurers (ABI) and Lloyds Market Association (LMA). When the group meet then review certain aspects of the car and then give an indication of risk to insurance companies, they take into account such aspects as:

• The cost of replacement parts following damage

• The cost of buying the car new

• The car’s performance

• The car’s level of security

• Body shell availability

• The average repair time of the car

It is worth noting that the proposed groupings aren’t binding, but are merely recommendations.Basically, in a nut shell it means that the higher the insurance group, the more risk you pose to an insurance provider and so, in most cases, the more likely your insurance premium is to be higher.

It’s easy to get confused when trying to understand what level of cover is better for you, so make sure you do your research carefully. This way you can be confident that you purchase the right policy for your particular circumstances.

There are three types of car insurance available within the UK:

Third party

This is the legal minimum level of insurance available within the UK. Third party insurance provides cover if you have an accident causing damage or injury to another person, animal, vehicle or property but this does not cover damage to the driver’s own vehicle.

Third party, fire & theft

Third party, fire and theft insurance offers a middle level of coverage compared to basic third party and comprehensive insurance. This covers the fire and theft of your vehicle in addition to the third party cover. Third party, fire and theft is particularly important in the UK insurance landscape as it provides a balanced option for those seeking more than basic coverage without the cost of comprehensive insurance.

Comprehensive

This is the highest level of insurance available within the UK. Comprehensive insurance provides cover if your car is stolen, damaged by fire or accidentally damaged. You are covered if you are involved in a road traffic accident and you’re also covered for claims made against you by other people for bodily injury or damage, made by your vehicle to their property.

Budget Insurance offers all three levels of cover with the option to add some great additional products to your car insurance package. Different levels of cover allow you to select a product that best suits your insurance needs.

Budget Car Insurance offers you simple, flexible car insurance at whatever level of cover you’re looking for. Budget Insurance allows you to decide whether you want to pay for your insurance in a one-off annual payment, or spread the cost across monthly payments (subject to status).

As well as offering car insurance, we also understand how important it is to provide you with the highest level of support possible. That’s why we offer a 24/7 claims helpline should you need us. 

To make life even easier for you, we also have an online portal available 24 hours a day, seven days a week where you can make payments, amend your policies and view and print all of your insurance documents.

To get a car insurance quote you’ll need to complete a quote form online and enter the following details:

• Your personal details: Name, Date of birth, address, job title

• Your car details: Registration plate or make, model and age

• Your driving history: How long you’ve had your driving licence, any claims or driving convictions and any years’ No Claims Discount (NCD) you have

• How your car will be used: Estimated annual mileage, where it’ll be parked and if there will be any additional drivers

You may be asked for additional information or specific proof dependent upon what the insurance provider is requesting.

The online quote process with Budget Insurance is really easy, we’ve worked hard to ensure that our journeys are as customer friendly as possible so we hope that getting a quote is an easy task for you. You can start a new quote here.

Where it used to be the case, with most insurance providers, that if you have comprehensive car insurance, you could drive any car with third party cover, this is now not a common feature with each insurance provider setting their own terms on this.

Some insurance policies do not cover you for driving other vehicles at all, some allow this at an additional cost and some offer this benefit on an ‘emergency’ basis only. The answer to this question is that, unfortunately, there isn’t a clear answer. You will need to refer to your insurance providers terms and conditions for their specific stipulations on driving other cars.

An excess is the sum of money that you will; be required to pay should you make a claim against your insurance. A compulsory excess is the sum that your insurance provider sets and is non-negotiable. This amount depends upon different factors including your age, the type of claim and your car type.

The compulsory excess amount is added to the voluntary excess amount to make your total excess should you make a claim. This amount will be outlined within your policy documents. Learn more about excess.

We’re sorry that you would like to cancel your policy. In some circumstances, you can complete this online through your My Account area or via telephone on 0344 412 2118.

You can find further information about cancellations, including fees and charges, in the ‘About Your Policy‘ section at the top of the Car Insurance page.

To transfer your insurance from one car to another you will need to contact your insurance provider in the first instance to advise them as to your new vehicle details. Your insurance provider will then recalculate your price and offer you the option to either insure your new vehicle or cancel your policy.

Please be advised that, if you choose to cancel your policy it is up to you to get alternative cover. Please be aware that it is against the law to drive a vehicle on a public road without insurance.

The question on everyone’s lips these days is, “Why has car insurance gone up so much?” The simple answer is, it’s a domino effect of several contributing factors.

First, the global economy has seen significant inflation rates which have inevitably impacted the insurance industry. With the cost of goods and services rising, insurance companies have had to adjust their rates to sustain profitability.

Furthermore, the increased use of sophisticated vehicle technology has driven up repair costs. Modern vehicles are now equipped with advanced features such as auto-braking systems, adaptive cruise control, and complex hybrid systems that are costly to replace or repair. This has directly influenced the price of car insurance.

Additionally, there’s been a noticeable increase in the number of car accidents, probably due to more cars on the road and an uptick in distracted driving. The more claims a car insurance company has to pay out, the higher the car insurance premiums become for everyone.

Lastly, changes in legislation and regulation have also played a part. New laws require insurance companies to provide more extensive coverage in certain areas, and these additional benefits are reflected in increased premiums.

A no claims discount, often referred to as a no claims bonus, is a reward scheme for policyholders who do not make any claims on their car insurance policies during the policy term. It is a feature prevalent in many types of insurance policies, but most commonly associated with car insurance.

Under this scheme, for every year that the policyholder does not file a claim, a certain percentage of discount is accrued on the premium of the subsequent policy term.

The percentage of discount generally increases with each claim-free year, up to a specified limit. This discount serves as an incentive for policyholders to drive safely and avoid making unnecessary claims.

It depends, on certain factors, as the ability to add someone to your car insurance will depend on the underwriter of the insurance policy. However, in the event that you are accepted, this process is typically straightforward and can often be accomplished with a quick phone call to your insurance provider. The individual you are adding could be a spouse, a family member, or even a friend who frequently uses the vehicle.

It’s important to remember that adding someone to your policy can potentially impact the cost of your premium. The insurance company will need to assess the risk associated with insuring the additional driver, considering their driving record, age, and other relevant factors.

It’s also important to note that all drivers on the car insurance policy will have cover while driving the insured vehicle, provided they have the permission of the primary policyholder.

In the United Kingdom, when you apply to buy car insurance, the insurers typically undertake a soft credit check to authenticate your details and assess your financial stability.

This is a common practice in the car insurance industry, and it is not something that you should be overly concerned about.

A soft credit check does not affect your credit score and is not visible to other companies. It allows the insurer to confirm your identity and assess risk associated with your financial behaviour.

However once you decide to take out a car insurance policy and choose to pay monthly, a hard search maybe shown on the individuals record.

While it might seem logical to think that you do not need car insurance if your car is off the road and not being driven, this is not always the case. There are circumstances under which you may require car insurance even if your vehicle is not in use.

For instance, if your car is parked on a public road, even if it’s not being driven, you may still be required by law to have it insured. This is because of the potential risk of damage to other vehicles or property.

This depends, as the customer usually has the choice of auto renewal when initially taking out the policy. Therefore, whether your have selected to auto renew or not will be decided at the point of purchase.

The answer can be found in your policy document or by directly contacting your car insurance provider. It’s crucial to understand the renewal process as it often involves a revision of premiums based on factors such as claims made during the previous period, changes in risk assessment, and market dynamics.

Moreover, some insurers may require policyholders to explicitly opt-in for automatic renewals.

The answer is yes, you can insure a car without tax and MOT; however, the legality of driving such a vehicle is a different matter entirely. While it is possible to obtain insurance without an MOT certificate or tax, it is illegal to drive on public roads in the UK without them.

A car insurance policy will generally require that your car is in a roadworthy condition, which includes having a valid MOT certificate. Furthermore, driving without tax is considered a serious offence and can result in hefty fines and penalties.

Whether or not your car insurance covers towing a caravan largely depends on the specific terms and conditions of your policy. Generally, a standard car insurance policy does not automatically include this type of coverage.

If you frequently tow a caravan, it would be wise to review your policy to ensure you are adequately covered for any potential damages or liabilities that could occur while towing.

Insurers will calculate the cost of your policy by evaluating various factors that influence risk and potential claim costs. Car insurance cost takes into consideration factors such as the driver’s age, driving history, and location, as well as the make, model, and age of the vehicle.

We may also assess the intended usage of the car, such as daily commuting or occasional driving.

Driver profile – Your age and driving history impacts car insurance costs because we assess risk based on past behaviour. A clean record suggests responsible driving, which could result in lower premiums. On the other hand, a history of accidents, traffic violations, or claims indicates higher risk, prompting a higher car insurance premium.

Location – Insurers assess the likelihood of claims based on crime rates, accident statistics, and traffic density in specific regions. Urban areas may have higher premiums due to increased traffic and theft incidents, whereas rural locations could benefit from lower rates.

Age, make and model of your car – Age of any vehicle can affect its value and reliability, making older vehicles potentially more prone to breakdowns or requiring costlier repairs. The make and model also play a critical role, as certain brands and types may have higher theft rates or varying safety features. These factors collectively help us predict the likelihood of claims, thereby allowing us to set appropriate rates that reflect the risk associated with insuring a particular vehicle.

Driver mileage – The more miles you cover, the higher the likelihood of an accident. Consequently, we assess your driving habits to tailor your policy accurately and set fair car insurance premiums. Accurate mileage data enables us to offer usage-based insurance, and potentially low-mileage drivers with lower rates.

Breakdown cover is a service designed to assist motorists whose vehicles have suffered a mechanical failure or breakdown. It ensures that drivers receive prompt roadside assistance, whether they are stranded on a busy motorway or in a remote location.

The service often includes towing, minor repairs, and sometimes even hotel accommodation if the vehicle cannot be fixed immediately. Breakdown cover provides peace of mind by mitigating the stress and inconvenience associated with unexpected vehicle malfunctions, making it an invaluable resource for drivers who seek reliability and security on the road.

To compare car insurance quotes effectively, begin by gathering multiple quotes from reputable car insurance companies. Ensure that each quote includes similar coverage levels and excess for an accurate comparison of car insurance cost.

Utilise online comparison tools to streamline this process and pay attention to additional benefits or discounts that might affect the overall value. Finally, review customer feedback and financial stability ratings of the insurers to ensure a comprehensive evaluation.

It depends on what car insurance group the vehicle is categorised into. For instance, while you might expect an older vehicle to have lower insurance costs, repairs can actually be more expensive. This is due to the difficulty in sourcing parts for older models, which often makes maintenance and repairs pricier overall.