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Lucy F, Bradford UK

Choosing the Parameters of a Policy

The parameters of a car insurance policy can be very narrow, encompassing only the most basic, legally required cover, or they can be very broad, enveloping a wide range of cover options, features, add-ons and benefits. Proper selection of your policy’s parameters involves an in-depth and forthright analysis of your needs and budgetary concerns. Then it takes proper research of your options to find the most affordable cover type.

Considering Your Needs

When you secure a loan to buy a car, your lender will influence the parameters of your car cover: They must protect their investment in your transportation until the loan is fully repaid. Lenders require the additional protection of fully comprehensive car insurance on that vehicle. Comprehensive cover has the fullest and broadest protection of any car insurance policy. It pays out for accidental damages, fire, theft and property damage or bodily injury to another if you are at fault in an accident.

Many drivers prefer the peace of mind of comprehensive cover even when there is no outstanding loan. Unless you have a considerable amount of money set aside to pay for repairs or the replacement of your vehicle, even a minor accident or an attempted break-in can be prohibitively expensive. Also, a comprehensive policy may cover the windscreen, windows and mirrors on your vehicle. Property inside the vehicle, such as a stereo, may be covered as well.

Speciality car owners may be required to carry comprehensive car cover to protect the great investment. Collectible cars, high-performance cars, many imports or luxury auto mobiles or modified “kit” cars must usually be covered by the high-benefit comprehensive insurance policy. The speciality insurance coverage allows greater financial protection than a conventional car insurance policy provides.

If cost is of greater concern than the breadth of your cover, third-party cover meets the minimum legal standard. Third-party cover provides only basic level of protection, paying out only to other parties for property damage or bodily injury when the insured is at fault in an accident. The intermediate policy of third-party fire and theft adds protection above basic liability cover if at fault in an accident. This mid-level cover protects you from fire or theft damage as well as damage caused by lightning strikes.

Financial Circumstances

Your financial circumstances must be considered when determining the parameters of your car insurance. Young drivers, students or older motorists on a tight budget may find that fully comprehensive policy premiums overextend their budgets. Those driver groups may find discounted policies from speciality insurance companies that tailor protection toward that target group. Car insurance providers might offer comprehensive protection to their targeted high-risk group at reduced cost and sometimes with added benefits. If you are in a special group, be sure to fully investigate these speciality carriers for potential cost savings.

Mature drivers, women drivers and others in a low-risk group might extend car covers through specialist carriers that cater to these low-risk groups. Because these low-risk drivers file claims or violate traffic laws very rarely, women and older drivers are deemed safer drivers and can often receive greater benefits at lower costs. They may get greater property protection or roadside assistance for a lower cost, for example.

Choosing the parameters of a policy requires careful consideration of both your cover requirements as a driver and the cover types you have available. With careful research, you might find a policy that offers extensive cover that you can easily afford by first looking toward speciality providers before standard policy providers, all at an affordable price. Don’t be left under-insured with a policy that is too restrictive, but you don’t want to pay for cover you don’t truly need either.

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