When someone owns a vehicle they are required by law to have insurance against this vehicle. This is basically to insure the vehicle if it is damaged, involved in a road accident, has been broken into or if it has been stolen.

Car insurance is available in three forms – Third Party Only, Third Party, Fire and Theft and Fully Comprehensive. The most expensive car insurance would be the Comprehensive insurance.

Comprehensive insurance is made to cover your car against any damages that are caused by a break-in, theft of the vehicle or items within the vehicle, weather conditions such as hail storms, any vandalism made on the car and also fire to the car. A single hail storm could cause serious damage to the car due to dentations made by the hailstones. Because there could be a large amount of dents to the car, the cost of repairing it could out waive the selling price of the car.

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Although this type of insurance is generally worthwhile having, there are also disadvantages that come with it. If someone has an old car which has very little value, it may be worth considering just obtaining the basic insurance such as Third party only. This is because the payments for having comprehensive insurance are quite costly which means they would pay out more money on a claim, however if your car is not worth much money, you would not require much on a payout. Whereas if you obtain third party insurance, your total payment would be considerably less which means you will have the spare cash to pay for the repair of your vehicle if you need to. If you do not make a claim or need any repairs, then you would have saved a considerable sum of money.

Nowadays, most people buy new or reasonably new cars. If they purchase these through finance from either a bank or financial institution, then they are required to obtain fully comprehensive insurance. This is basically because if you find it hard to keep up with the loan repayments, these institutions will need to sell your vehicle, so by having this type of insurance you will be able to keep the car in good shape.

When it comes to obtaining car insurance, everyone wants to get the best rate possibly. In order for this to happen there are a number of factors that need to be considered:

How old the policyholder is – A lot of car insurance companies will charge a higher insurance rate if the policyholder is a teenager or young driver. This is basically because they do not have the road experience and are more likely to drive faster and therefore have more accidents. The insurance company needs to be sure that they will receive enough money back from the policyholder in order to cover the possible claims. On the other hand, if the policyholder is older and has been driving for a few years they may receive a low rate because they are less likely to make a claim.

What kind of car the policyholder drives - If the policyholder has a car which is fairly new or sporty, then the cost of repairing it is likely to be quite high as the parts will not be easy to obtain and would normally be quite expensive. The car may also not be classed as being safe if it has an accident and it would be more likely to be stolen as it would be worth more than an old car. Because of these factors, the insurance company will want to charge higher rates of insurance again to ensure they receive enough money from the policyholder in order to cover the claim amount.

Where the policyholder lives – Certain areas within the UK have a higher risk of vandalism and car theft than other areas. Because of this the insurance rates will be based on where the policyholder lives. If they live in a high risk area, their rates will be higher compared to someone that lives in a low risk area. It will also depend on whether the vehicle is kept in a garage, on a driveway or in the road overnight. If it is kept in a garage it is less likely to be touched, whereas if it is kept on the road, it has a high possibility of being hit or stolen.

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