Insurance World

They’re in their early 20’s, freshly out in the world and earning good money, driving flashy cars that are absolutely dripping with expensive extras. Who are they?

They’re the latest “in crowd” women. They are demonstrating their freedom, independence and individuality and are apparently earning the money to fund their ladette lifestyle. Their souped-up cars with their throaty sounding wide exhausts, fancy spoilers and alloy wheels can be heard approaching from a distance by the drumming of the full-on car stereo. Quite clearly they intend to stand out from the crowd and the crowd can hardly ignore them. Figures released recently tell us that 18 per cent of women drivers in the 21 to 25 age group are driving these cars with their costly modifications and specialist trims, normally associated with male drivers.

The resulting increase in car insurance premiums in this group of drivers is hardly surprising. Their cars with their flashy modifications and expensive extras certainly attract attention and in all probability it’s not the sort of attention their drivers would choose to seek. Thieves are attracted to these flashy and expensive cars. The extras alone are tempting and easily re-sold on the second hand car accessory market.

Car insurance in general is falling and this is true for women in particular. Women generally have fewer accidents, do less annual mileage and are considered less aggressive drivers than their male counterparts.

Because of these statistics, insurers are very happy to insure female drivers. There are companies specializing in this market and there has been a great deal of advertising in the press and on television. All these companies are vying for business and have their own specific niche markets. There are carefree girlie groups, very posh middle aged women and young mums featured in the ‘ads. These specialist insurers can’t be relied on to offer the best deals, though, not matter how attractive the ‘ads or catchy the tunes. In all probability you’d find a much better quotation for your insurance by going to one of the internet brokers who’d come up with comparative quotes for you. You need to compare the cover, of course, but they’ll check out all that for you too, and even offer an on-line discount in the bargain.

Should the trend for flash and extras extend across the market, then certainly insurance premiums would show a marked increase, making it doubly important to shop around.

Incidentally, it’s the loyal customers who tend to get left behind in the best premium stakes. It’s very easy to get into the pattern of sticking the renewal notice behind the clock until more or less the day the policy is due to be renewed and then a quick call to the insurer and your insurance money is committed for another year. Spend a little time (and it really is very little) to find an on-line broker who’ll come up with some choices for you. If the price isn’t beaten, there’s nothing lost and you can remain loyal to your insurer. All the information the broker will need will be there on your renewal notice.

It’s worth the trouble. Honestly.

An excess payment is the fixed contribution you must pay each time your car is repaired through your car insurance policy. Normally the payment is made directly to the accident repair garage when you collect the car. If your car is declared to be a write off, your insurance company will deduct the excess agreed on the policy from the settlement payment it makes to you.

If the accident was the other drivers fault, and this is accepted by the third party’s insurer, you’ll be able to reclaim your excess payment from the other person’s insurance company. But what if the other driver is uninsured?

All motorists know that it’s a legal requirement (under Section 143 of the 1988 Road Traffic Act) to have insurance for any damage they cause to third parties. But still many drive without insurance. An estimate of the incidence of uninsured driving in the UK is hard to come by and, for the obvious reasons, those drivers involved in breaking the law have every reason to keep quiet about it.

Calculations from the Department of Transport suggest that in the UK around 5% of vehicles are being driven without valid insurance. This group of people not only impose costs on honest motorists in the form of higher premiums, but their presence on our roads also represents a serious risk to other road users. Consequently, uninsured driving is increasingly being regarded as a major social problem.

But driving without insurance is not a victimless crime. If you have an accident with an uninsured driver and the accident wasn’t your fault, the repair costs will be paid for by the Motor Insurers’ Bureau that’s funded in its entirety by the industry, or by your insurer. Therefore, if you’re involved in an accident caused by an uninsured driver you’ll eventually get you car repaired but you’ll still have to pay the excess and there’ll be no one to reclaim your excess from.

What is a Compulsory Excess?

A compulsory excess is the minimum excess payment your insurer will accept on your insurance policy. Minimum excesses do vary according to your personal details and driving record and by insurance company. Today the average excess is around Ј100, but younger drivers could be faced with excesses of up to Ј500 - whilst more mature, experienced drivers with a good driving record, could be offered an excess of just Ј50.

So what is a Voluntary Excess?
In order to reduce your insurance premium, you may offer to pay a higher excess than the compulsory excess demanded by your insurance company. Your voluntary excess is the extra amount over and above the compulsory excess that you agree to pay in the event of a claim on the policy. As a bigger excess reduces the financial risk carried by your insurer, your insurer I able to offer you a significantly lower premium.

The garage has repaired my car but it won’t release the car too me until I pay the policy excess to them. Is this right?

Yes, that is normal practice. But make sure you inspect the car when you collect it. Satisfy yourself that the repair is perfect. Then make sure you keep their receipt for your excess payment as you will need this if you’re reclaiming against a third party’s insurance. And just in case there’s a dispute, it’s a good idea to make sure the repair garage gives you a repair schedule. This will list all the repairs that were made to you car.