Car Owners in UK--Getting cheap insurance

Car insurance companies in the UK are numerous and varied, but they all function on one basic principal: risk management. They have to balance the cost of their insurance policies with the total amount they will pay out as a result of claims. They also need to make a reasonable profit to enable them to survive and grow as a business. However, so that you do not have to pay a lot to counteract the claims of careless or high-risk drivers, the cost of your car insurance will be proportionate to the probability of your being involved in an accident.

To calculate this probability your car insurance provider will consider a variety of factors, for example, your age and gender. You will pay a premium, which is an annual or monthly payment made to the insurance company in exchange for cover. Since each insurer will tend to consider different factors as being the most indicative of risk, this premium is never 'fixed'. The internet has introduced the opportunity to compare the many car insurance providers quickly and efficiently: use it wisely to shop around for the best deal (see Cutting the Cost). Advisers suggest reviewing your car insurance provider every twelve months, and/or when your policy requires renewal, to ensure that your policy remains competitive.

The cost of car insurance varies widely and depends on a variety of factors. These include for example your age and driving history. Not all insurers consider the factors to be equally important, and while one insurer may charge you £500 for cover, another may quote £1,500. Some insurance providers will cater for specific consumer groups, such as younger people or women drivers. You may be able to find cheaper insurance if you fit the target profile. There are also additional costs to be considered when you take out car insurance. There are fees and charges for administration of your policy, such as the policy cancellation fee. Additionally, there will also be costs involved with making a claim, such as the cost of hiring a solicitor to represent you.

Comparing insurance providers is the first step to cutting the cost of your car insurance. The next step is to take advantage of a No Claims Discount (NCD). NCD rewards your good driving record with reductions in your premium of up to 75 %. You can further reduce the cost of car insurance by taking advantage of voluntary excess; increasing the amount of any claim you agree to pay yourself. In return for this agreement, your insurer reduces your premium. For younger drivers, who are automatically classed as high-risk, the Pass-Plus scheme may be able to offer discounts of up to 20 – 30 % on their premium. Pass-Plus is an advanced driving training scheme designed to produce confident and safe drivers.