Comprehensive car insurance explained – Forbes Advisor UK

Multi-risk insurance is the most common option when you come to insure your car. But what is actually covered (and not covered) by this type of policy? What can we expect in terms of cost? And is it the right choice for you? Here’s everything you need to know.

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What is multi-risk car insurance?

Comprehensive auto insurance — or “comprehensive” as it’s also known — is the highest level of coverage you can buy for your vehicle. It will provide coverage for you and your car, even for an accident that is entirely your fault.

It will also cover damage to someone else’s vehicle or property, or if someone is injured. Damage to your vehicle as a result of fire or theft also falls under this type of policy.

If you have more than one car to insure, you can take out all-risk multi-car insurance.

Is multi-risk insurance a legal obligation?

Comprehensive car insurance itself is not a legal requirement, but having car insurance is.

The minimum level of cover you need to drive on UK roads is third party car insurance. This provides the most basic level of protection and only covers damage to other vehicles, other people (including your passengers) and their property.

Third-party car insurance will not provide cover for you or your car, meaning you will have to pay for any damages out of pocket.

Be warned that if you are caught driving without any type of car insurance in place, the police could issue you with a fixed fine of £300 and six penalty points. If the case goes to court, you could receive an unlimited fine and be banned from driving. The police also have the power to seize and destroy your vehicle.

If you keep your vehicle off the road, you don’t need car insurance. But you will need to declare your car ‘off-road’ with a ‘statutory off-road notification’ (SORN).

In addition to being able to purchase comprehensive insurance for your car, you can also purchase comprehensive insurance for most other types of vehicles. These include vans, motorcycles, taxis and even quads.

What does comprehensive car insurance cover?

Typical all-risk auto insurance will cover you for the following:

  • Damage to property of others
  • Personal injury – for you, your passengers and other third parties
  • Damage caused by fire, theft or vandalism
  • Accidental damage
  • Personal effects damaged or stolen from the car

Are all multi-risk insurance policies the same?

Car insurance policies vary in terms of the coverage they offer as “standard”, even if the policy is comprehensive. For example, a robust strategy might include the following elements:

  • Breakdown cover – provides you with roadside assistance in the event of a breakdown of your vehicle
  • windshield cover – covers the cost of repairing cracked or chipped windshields
  • Legal Protection Coverage – covers legal costs that arise from a claim or if a claim is made against you
  • Courtesy car cover – gives access to a temporary replacement vehicle if yours is being repaired
  • Fuel Error Coverage – covers the cost of emptying and cleaning the fuel tank if you fill up with the wrong fuel
  • Protected without claims – ensures that your no-claims discount remains intact if you make a car insurance claim

Some policies, however, will require some or all of these features to be integrated for an additional fee. Often what is covered and not covered as standard is reflected in the cost of the annual premium.

Is something not covered?

Although comprehensive car insurance policies offer the highest level of protection, not everything will be covered. Common exclusions include the following:

  • Accidents due to driving under the influence of alcohol or drugs
  • Driving without a valid driver’s license
  • Theft due to negligence – for example, if your car is stolen but you left it unlocked
  • General wear and tear, such as worn tires or brake pads – it is your responsibility to properly maintain your car
  • Driving other cars – this may vary depending on the policy. But if coverage is offered, it will generally be for short-term, emergency use only.

Who should get all-risk car insurance?

Comprehensive car insurance is suitable for regular drivers who want the highest level of protection available. On the other hand, it may not be the best option if you don’t drive your car often or if your car has a low market value and repair costs are relatively low.

In these situations, you may consider a third-party or third-party fire and theft policy adequate. However, always compare individual policies carefully to find a level of cover you feel comfortable with.

Is comprehensive car insurance the most expensive?

As comprehensive car insurance offers the highest protection, you can naturally expect it to be the most expensive type of policy. However, this is not always the case.

Historically, high-risk drivers – such as those who recently passed their test – have often opted for third-party car insurance to make motoring more affordable.

This has resulted in an increase in the number of claims on third-party auto insurance policies, which, in turn, has driven up the cost of premiums for this traditionally cheaper type of insurance.

The cost of your premium will depend on a host of factors including the car you wish to be covered for, your age, occupation and address – but overall the price difference between liability insurance and all-risk auto insurance has shrunk.

How to get cheaper multi-risk insurance?

The easiest way to find cheaper property and casualty car insurance is to shop around and compare coverage levels and prices. But you can take other steps.

For example, paying the full annual premium up front rather than in monthly installments can help reduce the cost, as you will have to pay an effective “interest” to be paid monthly.

Opting for a higher deductible – the amount you will have to pay for a claim – will also lower premiums. Just make sure the excess will always be affordable.

The type of vehicle you own can also affect premium prices, with smaller engines generally costing less to insure.

Adding safety measures such as an immobilizer or parking your vehicle in a garage every night will also reduce premiums, while reducing your annual mileage wherever possible.

Finally, if you are a young driver, you may want to consider a telematics or “black box” insurance policy. Here, a device is installed on your car that will monitor your driving habits, including your speed, braking and cornering, as well as the duration and duration of trips taken.

The data is shared with your insurer to help you calculate your premium. Simply put, the safer you drive, the lower your premium.

Shop at Renewal

New rules introduced by the Financial Conduct Authority (FCA) in January 2022 mean car (and home) insurance providers can no longer charge existing customers more for their renewal than they would charge a new customer for the policy equivalent.

Insurers have long offered their best prices to new customers in an effort to attract more customers and increase market share. But the new rules mean that existing customers should now benefit from fairer prices.

But that doesn’t mean that when your auto insurance policy comes up for renewal, your existing insurance provider will offer the cheapest price. The only way to be sure you’re getting the best deal is to keep shopping for your car insurance on a yearly basis.