Car Insurance for Young Drivers

Swapping your Mum for a Car Insurance Black Box

As young drivers, you have probably experienced the shock of finding out the cost of your first car insurance. Then, having passed your test, you will experience the cost of that insurance going up. This comes as a surprise to a lot of people. However, there is a logic in play here. When you are learning, you are under supervision. Someone is with you and your focus is learning to do things right and practice for a test. Once that is behind you, you’re free! On your own, or even with a bunch of friends the same age in the car with you. Its no longer your mum giving you sensible advice, it might be your your annoying younger brother instead. One way to possibly help with cost is to swap your mum for a car insurance black box. It’s a form of “supervision”, but without the constant er…shall we say…”advice”.

What is a “Car Insurance Black Box”?

It can also be known as “Telematics” or “Pay as You Go Car Insurance” by some companies. Keeping with the insurance industry’s exciting and innovative way of naming their products, this gets its name from the fact that the small device is both box shape and usually black. It is about the size of a smartphone and its job is to send information back to the insurer about your driving.

Myths and Bunkum

There are a lot of urban myths about these devices, some are complete bunkum, others are kind of based in a sort of truth which has been through a politicians speech edit. Here’s some examples:
  • The Insurance Company will automatically inform the Police if you are Speeding

Bunkum. Don’t get me wrong, you shouldn’t speed, it is illegal, dangerous and wears your tyres and brakes out faster, so trying to save money on insurance while at the same time regularly speeding, makes you a bit of a twit. If you are involved in an incident and the police are interested, they can request information obtained through the black box, and use it either to help you, or prosecute you, depending on what it shows.

  • Having a Black Box fitted will Void the Cars Warranty.

    Bunkum. Nothing really to add here. Just Bunkum.

  • The Insurance Company will use the Information to prove you were to Blame for an Accident

    Maybe. If an accident was your fault, the information may help to prove it. On the other hand, it can just as easily do the opposite. If you say you were hit while stationery, the Black Box may well be your best friend.

  • The Black Box will Interfere with my Sat Nav or Car Radio

Not at all likely. Fitted properly, a Black Box is extremely unlikely to interfere with any other electric devices in the vehicle.

  • My Insurer will not Cover me if I Drive outside of Certain Times

Mostly Bunkum. Some insurers will insist that you drive only at certain times, during the day for instance. You may have put a restriction on yourself in order to keep costs down and you, in all good faith, had every intention of keeping to those restrictions. However, things can change. You may get a call from someone asking you to take them to hospital during the night. Or you may have been out for the day and the traffic is so bad on the way back it takes hours longer than you anticipated and into your “curfew”. No decent insurer is going to question this. Where they get rightfully interested is when the information being sent back to them via the Black Box shows a constant disregard for the restrictions in place. In that situation, its time to review the restrictions.

  • It Costs to Have a Black Box Fitted

Sort of True – sometimes. The fact is that a few providers will make a charge for fitting the device, many do not. Like all insurance policies there can also be admin charges for any changes to your policy during the term and a charge for the removal of the device is not uncommon. I may have mentioned this before….READ THE TERMS AND CONDITIONS FIRST!

What Information Does it Send Back?

The purpose of the box is to build up a profile of your driving style. The information it can send back may include:

  • Speed

  • Acceleration

  • Location

  • Distance Travelled

  • Time of Day

  • Cornering

  • Braking

  • Types of road usually used

  • Length of time driving

It is easy to become a little paranoid about what could be described as a “Big Brother” system where all your movements are constantly monitored. It certainly is not for everyone, and that’s fine, but if you are comfortable with the idea it can save you money. Remember, the insurance company is building up a profile of your driving style in order to assess you in terms of risk. If you suddenly have to brake hard in an emergency, you shouldn’t be worrying about whether you are going to be penalised by the insurance company. They honestly do not care two figs if you occasionally brake late, speed or once in a while drive for four hours without a break (though its really not a good idea is it?)

Who is it Good For?

It is mainly promoted for newly qualified or young drivers. There is no getting away from the fact that this group has statistically more accidents than any other. If you are in this group, then your insurance is based on the statistics amassed from everybody in the same group. Using a Black Box is a way of personalising your insurance to just your style of driving, and may potentially save you money.

Everyone can in fact use this method for their insurance, though far fewer experienced people with full protected no claims bonus use them. Other groups that may find it worth looking into include:

  • Drivers that do very low mileage

  • Newly UK resident drivers

  • Drivers with convictions

  • Drivers with a poor claims history

 

Can I See the Information that is being Collected?

Most insurers give you website access to your account and you can see all the information that is being collected about you. You can see how your driving style affects your profile and then adjust the way you drive in order to make improvements, and possible reduce the insurance cost.

What are the Drawabacks?

The main one, and most uncomfortable, is that you may not be as good as driver as you thought you were! It is entirely possible that your particular driving style is not one the insurer likes and the whole exercise could end up costing you more. You could turn this into a positive though and use the evidence to have a bit of a think about improving your driving habits.

Another is that you may have underestimated the amount of miles you drive and the cost of insurance will increase as the true number of miles you drive becomes apparent. Like going over your limit on your mobile phone though, the insurer should keep you informed as to whether you are getting close to the mileage you gave them.

If it turns out that you are actually driving at peak times on busy roads, when you originally told the insurer something different, then you could find the cost of your insurance increasing.

Although the principles are pretty much the same with all providers, there are some subtle variations so if this is something that may interest you, then be sure to find out all the details before applying. One last thing, having a Black Box fitted means that if the car is stolen, it will be easy to track and find!

 

Do I Need Car Insurance Business Use?

car

Make Sure You’re Correctly Insured!

That dropbox that asks you what you use your car for is not there so you can try out all the different options until you get one that gives you a price you like. It is crucial that you answer this honestly, otherwise you run the genuine risk of not having a claim paid in the event of an accident. One of the most common questions I was asked was “Do I need car insurance for business use?” To make things a little easier, here’s a quick guide:

Social Domestic and Pleasure

This is usually the cheapest of all the options, so there is the greatest temptation to tick this option. However, if you are using your car for commuting or any form of travel in connection with your business (or your employers business) then choosing this option is an absolute no no! Choose this for everyday car use such as going to the shops, visiting friends or going on holiday.

 

Social, Domestic and Pleasure + Commuting

This is for everything that Social Domestic and Pleasure does plus the cover needed for you to travel to and from a regular place of work. You need to choose this option even if you drive to a station, park and catch a train to work. It is even necessary to have this if you are just the driver that happens to give someone else a lift to work on a regular basis.

Business Use

Most companies have different levels of business use depending on what you are doing. These levels, rather unhelpfully, vary from insurer to insurer. Here are some of the more typical levels you will find.

Business Use 1.

This is probably the lowest level and covers you for going between various places of work.

Business Use 2.

The same as Business Use 1, but can also include a named driver using the vehicle in connection with your business.

Business Use 3.

This includes the first two but also covers you for things like making deliveries or sales calls. It is the cover that most company representatives need. Even if you work in an industry such as the care industry and you use you own car, you will need Business Use due to the travelling between service users.

Commercial Use

This is for people who pretty much drive for a living. van drivers, taxis, instructors and tradesman will all need to have full commercial use on their vehicle insurance.

This is just a guide. If you are not sure which category you fall into, you must ask. Just tell your provider what you are using the vehicle for and let them put you in the category that they feel suits you best. Don’t forget to tell them if you change the use of your car during the course of the insurance cover, don’t wait until the renewal!

Top Ten Travel Insurance Tips

 

Travel insurance is one of the easiest policies to get, a few questions online and bang! There’s the quote. A few more clicks and you’re on risk. Easy is good, but make sure you follow these top ten travel insurance tips to make sure the cover is the right cover for you.

travel insurance 1

sea-1215565_1920

gadgets-336635_1920

jet-766192_1280

medical-563427_1920

pay-706798_1280-001

person-731144_1920

pool-690034_1280

sand-289225_1280

wheelchair-414740_1280

And finally, use a holiday organiser to write down all the information such as flight numbers, passport numbers, hotel contacts and emergancy numbers…just in case!

Have a Great Holiday!







How to Make Sure Your Clothes are Insured

Imagine you have no clothes…

OK, I’ll put that another way. Imagine you have no clothes…apart from the ones you are wearing! That is, no clothes, no shoes and even no handbags or manbags. You have to go out today and buy a complete new wardrobe for you and your family.

How much you you have to spend on replacing everything – and how would you afford it?

For some, it won’t be just a question for the imagination. A serious fire or flood are just two incidents that could make such a question reality.

Most peoples wardrobe is something that gradually evolves over time. Quite often you won’t give a second thought to how much you have spent on clothes and accessories over a number of years. If you have children, it might be more of a “front of the mind” thought as the cost of shoes and other “must haves” are usually bought more frequently.

If you have a job that has a certain dress code, you may have items that are just for work. If you are suddenly without these, you still have to go to work and it might raise a few eyebrows in the office if you turn up in your star wars onesie explaining that its all you have until payday. Assuming you are insured, it may take a little while for even an emergency interim payment to come through, so it may be the credit card as the only immediate option.

You are probably not insured for the replacement cost of your clothes and shoes

Assuming you are insured, do you know how your insurance company will settle a claim for clothes? Do you know how much you should insure your clothes and shoes for? While I am not stopping you from immediately going through your drawers with a fine tooth comb and listing every last sock and belt, it probably would be a bit time consuming and not that productive. However, it shouldn’t take to long to just quickly go through the main items and quickly list a replacement cost and then total it up. You may be surprised at the result, a total of a few thousand pounds can quickly be reached. If you have designer clothes then the total can get much higher. If you do a sport or a leisure activity, the average cost of clothes required for it are usually much higher than your everyday clobber.

Once you have a figure, you can then turn your attention to just how your insurance company treats clothes and shoes in the event of a claim. Almost always they will be covered, but, even if you have a “New for Old” policy, they will be often only covered for their “second hand” value. This means you will get either the cost of replacement LESS AN AMOUNT FOR WEAR AND TEAR or an estimated second hand cost. To make this clearer, here’s a simple exercise for you to do right now. Go to your wardrobe and pick out an item of clothing that you feel you spent a fair amount on, preferably something with a known label. Now go on to Ebay and type into the search box the make, style and size of the item you have chosen. Make sure you click the “used” button and you may have to do a bit of digging in order to find the same or similar item. Now look at the price on Ebay and compare it with what you remember paying for it. I’ll bet there is a bit of a difference. A slight quirk is that usually bags are considered as “contents” rather than “clothes” and as such you may find that you will get the full replacement cost in the event of a claim.

So what can you do to make sure you are covered properly?

Firstly, get the figures right. Make sure you know just how much replacing everything would cost. Then talk to your insurance company and tell them what it is you expect from the policy. If it turns out that they are not able to give you the cover you want, then its time to look at the more specialist type policies that are available. A lot of companies will offer a higher degree of cover than that which is available from their standard products if you ask, and there are a number of “High Net Worth” policies which will allow you to have greater degrees of cover, especially if you have designer or vintage clothes or shoes.

One last point. Your claim doesn’t necessarily have to be for a replacement for the item damaged. It may be that the cost of cleaning or repair is a more cost effective option for both you and the insurance company, so before you write anything off completely, check to see if that is a viable option.


What does “Indemnity” mean?

Claims are generally settled on a “New for Old” or “Indemnity” basis. Simply put, a claim settled on an Indemnity basis will have an amount deducted for “Wear and Tear” The principle behind an indemnity settlement is the financial restoration to the same situation that existed just before the loss. In other words it puts you back in the same financial position you were in prior to the loss, so that you are no better or worse off than you were immediately before the loss.

If your claim is going to be settled on an indemnity basis, the amount you will receive will be based either on how much you would pay for the item second-hand, the “Market Value”, or the actual replacement cost of the item less an amount age and use, sometimes also referred to as “Depreciation”

As an example, say you have an expensive bicycle stolen from your home. It cost £1500 two years ago. This type of item can depreciate in value quite quickly and to buy the same model that is also now two years old would cost £800. If your policy also has a £100 excess, your claim will be for £800 less the excess and you will actually receive £700. There is nothing wrong with the claim being settled in this way. However, over the years I’ve encountered so many people who have been disappointed in a settlement like this purely because they were unaware, until it was too late, that this is how the policy will be effected.

Some policies which are set up on a “New for Old” basis actually have elements of them that will be an “Indemnity” basis. Typically clothes and some other personal effects, or furniture that may be deemed over a designated age can , and will, be settled based on replacement cost less an amount for wear and tear.

As with everything to do with insurance, you need to read the terms and conditions before you buy, and ask questions about how a claim will be settled before you find out the hard way.


What Is wedding Insurance?

A wedding is about as an important event as you can get. The cost of wedding services can soon mount up, planning it involves the bringing together a great deal of ideas as well as the services of many professionals. The pressure for it to go smoothly is immense, and, unfortunately, the scope for things not to go quite so smoothly is equally large. This is why Wedding Insurance is so popular. But just what is wedding insurance? What does it actually cover?

 

weddingLike all insurance, wedding insurance cover is a contract agreement
where, in return for a stated payment, an insurance company will compensate for a loss. This can be of physical property, such as the rings; or a loss of a service, such as the photographer not making an appearance. However, the actual cover, or more importantly, the exclusions of cover need to be looked at and understood before handing over the premium. And, as ever, lots of questions need to be asked!

 

One of the benefits of wedding insurance is that it is designed to bring all the possible perils inherent in arranging a wedding under one insurance product. Annoyingly, this can also be a source of problems as well.

I have referred to the issues associated with “dual insurance” before. It is the principle whereby in the event of a claim you are obliged to disclose whether or not another insurance may exist that would also cover the claim. While it shouldn’t in itself prevent settlement of the claim, it can slow the process down and even highlight the possibility that you have paid a second time for insurance you didn’t actually need.

Let me give an example…

Most home insurance policies allow for an increased sum assured during the run up to a wedding, this is to take into account any gifts that may be stored at the house prior to the ceremony. A stand alone wedding insurance will also have a section relating to gifts. Dual insurance is almost inevitable.

Whether or not wedding Insurance is for you, is a decision for you, but hopefully you will be in a much better position to make an informed decision after you have read this.


WHEN DOES THE INSURANCE ACTUALLY START?

Most Wedding Insurance providers will state that you should take out wedding-rings-150300_960_720cover as early as possible. However, some state a time limit prior to the wedding of, typically, two years. It is likely that if you have already made arrangements outside of any set limits then cover will actually be activated from the day the insurance is taken out.

WHEN DOES THE INSURANCE FINISH?

Not as straightforward as you would think. The policy doesn’t end at the stroke of midnight on the wedding day. You may not know that there is a problem with the photographs for some weeks after the event. Make sure you check how long the cover is in force for and the time limits imposed for making a claim.

AM I COVERED IF ONE OF US CHANGES OUR MIND ABOUT GETTING MARRIED?

I don’t think anyone will be surprised that the answer to this is “No”. It does give rise to one of my favourite insurance exclusion phrases though, the “disinclination to marry” clause!

WHAT IF THE WEDDING IS CANCELLED DUE TO ILLNESS OR DEATH?

The fear of cancellation following an unexpected event is probably the biggest reason for taking insurance. There are a number of reasons a wedding may be cancelled, one of the most common being injury, illness or death. Cover in this instance typically includes the bride and groom (or prospective civil partners) and close relatives as well as significant members of the wedding party whose “unavailability” would make it inappropriate to go ahead.

While this deliberate vagueness is really helpful in many ways, as it allows for the inclusion of your closest childhood friend with whom you have been inseparable forever, the onus falls entirely on you to make the case for their non attendance being the reason for cancellation.

It is common for there to be an exclusion for “pre existing conditions”. This is very important if you have a close family member who has had poor health.

I would guess that in most families, someone has suffered a serious illness, and where this is the case I would suggest you do the following: Firstly, talk to the person involved. Ask them what their feelings are if they suffer a relapse and cannot attend, then throw in your own thoughts about how you would feel. Secondly, contact the prospective insurance provider and explain the situation. Be prepared to obtain a doctors letter setting out the situation and possibly even providing an opinion on the suitability of attending. It may well be that you are told that cover will not be extended to that person, but at least you will know and can be prepared for the worse.

With regard to “pre existing conditions”, check out what the insurance company’s definition of what they are. If for instance, the Bride’s Father had had a heart attack 20 years ago, not on medication currently and has another heart attack a week before the wedding, I personally think it unlikely that they could invoke the “pre existing condition” clause. Generally speaking, if you have a doubt – Ask First!

WHAT ABOUT COVER FOR FAILURE OF SUPPLIERS?

weddingThe simple answer here is that failure of suppliers is something that wedding insurance will cover to some degree, including deposits and the cost of sourcing alternatives at short notice. There is a more complicated answer, so here goes…

The list of suppliers and service providers for any wedding is long. Typically, it will include the venue, photographer, cars, entertainment, cake, flowers, suit hire, caterers and hairdressers. I’m sure you can add a lot more. However, the points I am making here are general points that are the same regardless of the service being provided.

Above anything else, get an agreement with every supplier.

Then read the agreement with every supplier.

Then ask for anything you are unsure about to be clarified – in writing.

Although a Wedding Insurance policy will state the cover that is in place for the failure of goods and services, the fact is you will have difficulties with a potential claim if there was not a written agreement, contract, letter of terms and conditions with a supplier. In real terms this means that if you have asked your uncle Bert, who is a great amateur photographer, to be your wedding photographer, and he doesn’t turn up resulting in you having to pay top dollar for an instant professional replacement; you may well have problems with the claim. So, even if you are using uncle Bert, get an agreement as to what is expected from him.

Most professionals will have standard terms of business and agreements which they will provide to you. They will set out the services they provide and may have a section on the limits of their liability if things go wrong. They will (or should) also have there own insurers who, in the event of a claim will also provide compensation for any problems you may have as a result of a problem caused by the failure of their client.

I would also suggest that you consider paying for your suppliers using a credit card. Under section 75 of the Consumer Credit Act, the card provider can be equally liable under certain circumstances for refunding your payment in the event of contractual failure. I am not usually a great fan of credit cards, but it does provide a further layer of protection and, given the range of interest free and cashback cards available, using one might be of use for other reasons as well.

If you find yourself in the unfortunate position of making a claim, as well as informing your stand alone Wedding Insurer of the relevant incident, also tell them if you paid by credit card, give them a copy of the agreement with the supplier, tell them of any other insurance cover that may be in force such as your home insurance. Remember, the purpose of insurance is to put you back in the position you were (as far as is possible) before the incident that gave rise to the claim. It is not to put you in a financially better position.

IS THE STAG AND HEN PARTY COVERED?

Almost certainly not. If you feel the need to insure this, there are stand alone “Event” insurances that may well do the trick. Usually though, exclusions include incidents that may occur “whilst under the influence of alcohol”. I’ll leave you to decide whether that makes it worthwhile or not!

IS THE HONEYMOON COVERED?

Again, almost certainly not. You will have to take appropriate travelwedding-rings-150300_960_720 insurance, as you would for any trip abroad, in order to be covered properly.

WHAT IF I AM GETTING MARRIED ABROAD?

Most Wedding Insurance providers provide for weddings abroad. Conditions are slightly different and, as always should be read closely. Some have restrictions on location, with USA and Canada frequently singled out for special attention, or even exclusion. You will almost certainly need to have your own separate Travel Insurance as well, although some providers may wrap up the two different policies into one package.

AM I COVERED IF ANYTHING IS STOLEN?

Yes…and no.

If anything to do with the wedding is stolen, such as gifts or the rings, you are probably covered depending on where it was stolen from. If it is from home, you are covered probably by both the Wedding Insurance and your Home Insurance, subject to your normal terms and conditions. If it is from a car, then the car would have to be locked and the items not visible from the outside. If it is from the reception then cover is excluded if it was stolen by someone that was invited to the wedding. As always, the full list of exclusions are listed in the various policy summaries.

I AM USING A WEDDING PLANNER, DO I NEED WEDDING INSURANCE?

Like any other professional, a wedding planner will have a contract setting out what services they will and will not provide. Typically, stand alone Wedding Insurance will not cover the services arranged by a wedding planner, so if you are using one make sure you know what the insurance position is regarding them.

WILL THE POLICY COVER ME IF THE WEDDING AND THE RECEPTION ARE ON DIFFERENT DATES?

Usually yes, though there may be a time limit on how far apart they are.

HOW MUCH SHALL I INSURE MY WEDDING FOR?

wedding-rings-150300_960_720Most providers offer different levels of cover at different prices. The simplest way to decide the right cover is to make a list of all the costs involved and then choose the level closest to the total cost.

 

Wedding Insurance, like all insurance can be of great benefit for the right people in the right circumstances. Your decision should be based on cost and the potential benefit to you after taking into account what, if any, cover you have already.