Auto insurance has become a widespread financial process in many countries. It is also a legal requirement in countries such as UK, USA and South Africa, whereby it is illegal to drive a vehicle without a proper car insurance policy. It is important to discuss some of the commonalities that UK car insurance shares with insurance from other countries.
Common Aspects of Car Insurance Companies:
- Car Insurance levels
- Insured party : a single person can obtain insurance for a car against severe personal injuries. It can also denote a company such as a car rental firm that acquires insurance for its salaried drivers against bodily injuries.
- Insured car/cars : an individual or an auto company acquires insurance against collisions or damages to the car.
- Third party : Insurance against damages to someone else’s property and car. It excludes damages against one’s own car.
- Premium factors - The cost of insurance premiums is dependent on various factors such as age and gender of the car owner.
- Age : Young drivers, such as students, usually have to pay a higher insurance premium. Discounts are offered in some countries for student drivers.
- Gender : Women tend to drive less as compared to men, therefore they are generally offered less expensive premiums
Unique Aspects of Car Insurance Companies
UK car insurance has its unique features which include Pass Plus Scheme, Road Traffic Act, Road Tax and MOT Test.
Pass Plus Scheme : A training course for new drivers designed by Driving Standards Agency (DSA) and put together by the insurers and the driving instruction association. Once a driver finishes the course they are eligible for a substantial discount on auto insurance. Pass Plus can be taken within a year of getting a driver’s license. Discounts are offered on insurances such as fully comprehensive cover, fire and theft insurance,and third party insurance. It comprises of 6 practical components such as:
- Driving in city
- Driving in all weather conditions
- Driving on countryside roads
- Driving at night
- Driving on dual carriageways
- Driving on highways
Road Traffic Act : Known as RTA, it is concerned with certain aspects of car insurance along with other motoring laws. According to section 143, an individual should not drive a car without possessing at least third party car insurance. It also states that an individual should not allow any other person to drive their car without having auto insurance. Should the police find the driver not in possession of car insurance documents, they will have to face a stiff penalty.
Road Tax : Known as Vehicle Excise Duty, this tax is enforced by the UK government on every car, payable beforehand for a 6 -12 month duration. Road tax can be purchased through Driver and Vehicle Licensing Agency (DVLA) or local post offices. At the time of procuring of road tax, car owners are asked to show insurance papers and MOT certificate. Road tax reminders are sent to car owners prior to their expiry date. The disc must be displayed on the windscreen of the vehicle. If the disc is not shown, the driver will have to pay a fine.
MOT Test : For cars that are more than 3 years old, the MOT becomes a legal requirement in the UK. The MOT is a test to check the fitness of the car. Areas that are checked include: seat belt capability, tire tread and engine efficiency. Tests are conducted at a registered center. If the vehicle successfully passes the test, a MOT certificate is issued. The MOT certificate should be carried by a UK motorist all the time and has to be renewed every year.
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