You’ve finally bought that dream car and can’t wait to hit the roads. But before taking your first ride, you need to ensure the car is perfectly insured. After all, you are legally obliged to have car insurance in most parts of the world. Skimp on this, and you risk finding yourself in the wrong hands of the law.
Either way, buying the most suitable car insurance for your needs is no longer a hassle. Now more than ever, you can compare multiple insurance quotes online in a couple of minutes. Here are some of the important things you need to know about auto insurance.
Why You Need Car Insurance
Auto insurance offers you financial protection in the event of an accident happening. And some types alco cover claims arising from injuries to other people. If you drive a roadworthy car, you legally need at the minimum a basic level of cover commonly referred to as third party insurance, even if you don’t drive it.
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The only exemption is if you officially register your car as off the road, with a Statutory Off-Road Notification (SORN). Consequences for driving without insurance range from a fine and at least six points on your license. You might even have your car taken off you.
What is No-Claim Bonus?
When comparing auto insurance quotes, there is a good chance you will come across the term No-claim bonus. This is merely the discount that insurance companies offer when you don’t claim on your policy. It increases with each year that you fail to make a claim.
But in the event that you’re involved in an accident and you claim it, you generally lose two years’ worth of no claims bonus and your premiums increase. If you have more than one accident in a year, you risk losing all your no-claims bonus.
The easiest way to safeguard your no-claims bonus is by paying for an add-on called ‘no-claims discount protection.’ What this simply means is that you can make claims without it affecting your bonus in any way whatsoever.