It is reported that many motorists would consider exchanging their regular petrol and diesel vehicles for a more eco-friendly electric motor.

It seems apparent that the general motoring public have become more aware of the negative effects that their cars are having on the environment. The onset of the credit crunch, causing the British public to tighten their purse strings, is also a contributory factor. Electric cars are now starting to be a serious consideration for some, particularly those living in and around London.

GoinGreen report the electric car has many benefits, claiming they are so cheap to run that you “recoup the purchase and running costs within a year”. You are also entitled to “free parking, exemption from road tax and the congestion charge in London and these cars attract low insurance grouping”

The obvious benefits to driving an electric car could soon see an increase in car insurance policies on electrical vehicles. Many popular insurance companies already have these policies and special discounts in place.

 

Electric vehicles have been around for a number of years now and a number of new technical innovations and tax advantages mean they are increasing with popularity.   They are powered by an electric motor (DC or AC) which draws its power from an on-board battery packs which act as an energy store.  Batteries, usually Nickel metal-hydride or Lithium-ion are charged by simply connecting the vehicle to a mains power supply, and is usually charged overnight for a full charge.  A feature of most modern electric cars is the regenerative braking system which allows the battery to be topped up when the brakes are applied.

 

Current electric vehicles available in the UK tend to be smaller 2 seater cars which are smaller and therefore lighter.  A range of 40 to 100 miles is achievable with top speeds from 25 to 45 mph.  This makes them favoured by city drivers, especially where a congestion charge is in force such as London where huge savings can be made and traffic is generally low speed.  Because they are zero-emission vehicles, they generally have many tax advantages including the fact they don’t run on petrol.  Emissions are however produced during the generation of electricity unless a renewable energy supplier is used.

Inflated insurance claims are a relatively common occurrence but beware, Police and insurers are forging much closer working relationships using technology and databases to monitor this kind of activity and taking tough action on those identified.

As an example, it was recently reported that a gang who conned insurance companies out of thousands of pounds by staging car crashes have been sentenced to a total of 10 years imprisonment.

Thirteen defendants were today sentenced at St Albans Crown Court today following a two-year investigation by Hertfordshire’s Serious and Organised Crime Group into the ‘Crash for Cash’ car insurance scam - one of the first cases of its kind prosecuted in the UK.

The investigation, codenamed Operation Mysterious, revealed the gang was making dishonest claims to insurance companies for compensation totalling more than £250,000.

The gang were claiming against road traffic collisions that had never happened.

Prison sentences of up to two and a half years were dished out to the principal offenders, with those with less involvement receiving suspended sentences varying from sixteen weeks to 6 months.

Upon sentencing, the judge said

“these were serious offences which impacted on everyone as this type of criminality causes insurance premiums to be raised. He added that their activities required significant planning and were only detected due to the facilities available to the prosecuting agencies in this case”

Speaking after the hearing, a police spokesperson who worked on Operation Mysterious, said: “This outcome sends out a clear message to fraudsters that their activities will be uncovered by the police and specialist agencies.

With support from the Crown Prosecution Service, the constabulary has also been able to restrain more than £1 million in assets from those convicted with a view to securing confiscation under the Proceeds of Crime Act. This legislation enables us to hit criminals where it hurts – in their pockets.”
Fraud like this is not restricted to car insurance. Insurance companies are stopping fraudulent claims to the tune of over £1 million a day. What’s more, they think there is plenty more fraud being committed which hasn’t been detected it yet.

The best estimate for undetected fraud in the UK is around £1.6 billion a year.

You may overhear people talking about accidents they have had with the outcome being described as a “knock for knock”.

The inference is that liability, and therefore blame, is shared. This is not the case.

A knock for knock agreement is an administrative, cost efficient manoeuvre used by insurance companies.

It is quite simply an agreement between the 2 insurance companies whereby after an accident, each insurer pays for the repairs to its own policyholder’s vehicle. Fault does not come into it, it doesn’t matter who was to blame and only really works effectively for the policyholder if they were insured on a comprehensive basis.

This sort of arrangement is not unique to car insurance companies; it is also used in the marine insurance industry to a certain extent.

While an insurer may be able to pursue a recovery from the party responsible for an accident from his insurer, this is a costly administrative procedure. The Knock for Knock Agreement simplified recovery of claims between insurers with the cost being seen to balance out over a period of time.

About 10 – 15 years ago, some insurance companies with such agreements in place, started to strategically move their principal customer base away from Comprehensive to Third Party Fire and Theft (TPFT).

These TPFT based insurers found themselves with a distinct advantage over their comprehensive based insurance competitors, as they of course, didn’t have to pay for their customers’ repairs.

It wasn’t that long before the Comprehensive based insurers cottoned on to this and withdrew their knock for knock agreement with the relevant TPFT based insurer.

It is therefore likely there are fewer of these types of arrangements in place in the modern business world as there used to be.

Everybody accepts that if you own a high performance car, you can expect to pay a significantly higher premium when compared with someone owning a more standard car.

 
Their powerful engines and the speeds they are capable of reaching, make it statistically more probable that those drivers will be involved in an accident(s) with inflated settlement costs for the insurance company.

 
This becomes even more probable if  younger or inexperienced drivers are involved. This may seem a bit generalistic, tarring all young and inexperienced drivers with the same brush (so to speak), but that’s the way insurers see it. The only way these people can expect reduce their premiums for these high performance cars is by avoiding any accidents/claims or convictions as time goes by.

 
A purpose built high performance car is likely to be easier and indeed cheaper to insure than one that has been modifed. It is no good simply putting a bigger engine into the car unless you modify other parts of the vehicle such as the suspension, wheels braking systems. It may be unsafe if the rest of the vehicle can’t  safely cope with the higher performing engine.

 
If you are one of those people that intends to own high performance vehicles, it is certainly worth considering taking some kind of advanced driving course, for example from the Institute of Advanced Motorists. This may earn you a discount from your insurer

It is firstly important to recognise that possession of a valid insurance certificate for your car does not automatically mean you comply with the Road Traffic Act 1988 Part V1, Section 143 which defines the compulsory insurance requirements for motor users.

 
There are several conditions that you need to be aware of to ensure your insurance remains valid.

 
• Your insurance certificate covers you (the policyholder and any other drivers named on your policy
• You are insured to drive the vehicle mentioned on the certificate only unless it specifically states you are able to drive other cars (unless you have a specialist policy such as a motor traders, this will normally be restricted to other vehicles not belonging to you)
• Your car must be in a roadworthy condition
• You must be a valid UK driving license holder permitting you to drive the vehicle
• You must only use the vehicle for the purposes mentioned on your policy (you cannot use your vehicle for business purposes or even hill climbing racing events if your policy only covers you to use your vehicle for Social, Domestic, Pleasure and commuting to a single place of work
• Ensure your payments are up to date
• If any false, fraudulent or exaggerated claim is made under your policy, you will be running the risk that no elements of your claim will be paid, leaving you personally responsible for all associated accident costs (both yours and the 3rd parties if it was your fault) and your policy will be forfeited.

An excess payment is the fixed contribution you are contractually required to pay on each and every occasion you claim for repairs to your vehicle through your car insurance policy. There are 2 types of excess that can be applied to your policy:-

 
• Compulsory – where your insurance provider will only supply the necessary insurance cover if you agree to pay this amount should you claim on your policy.
•  Voluntary – where your insurer agrees to discount the premium you pay in return for you agreeing to pay an agreed contribution towards any repairs to your vehicle if you claim.

 
The amount of compulsory excess you will be required to pay will depend on a number of factors such as:-

 
• Your age
• Your driving experience (new drivers are likely to attract a higher excess that say someone who has been driving for a number of years without incident)
• Your previous driving history (whether you have had previous accidents or convictions)
• Whether you have any medical conditions that may affect your ability to drive (certain medical conditions may increase your excess)
• The model of car you are driving
• A combination of any/all of the above

 
A voluntary excess is generally available to all policyholders, even those subject to a compulsory excess. You could generally expect to receive somewhere between 5 and10% off the insurers normal premiums in return for taking say a £100 voluntary excess. This could increase a little more if you agree to take an even larger voluntary excess of say £250.

 
Following a claim, you normally pay this excess direct to the repairer when you collect your car. Repair specialists recommended by your insurers tend to provide a 2-3 year guarantee on their work so it is always woth checking this out.

 
Normally the payment is made directly to the accident repair garage when you collect the car. If your car is declared to a write off (it is not considered economical for repair), your insurer will deduct the excess from the settlement payment it makes to you.

 
If the accident was the other drivers fault, and this is accepted by the third party’s insurer, you will be bale to recover your excess from their insurer

There are two critical monetary factors to consider before making a claim for damage to your vehicle from your insurer.
• Your policy excess
• Your no-claims bonus entitlement (NCB).
Your policy excess is the amount you pay towards repair (or deducted form a settlement figure your insurer offers in the event the car is considered a “write off” or stolen but not recovered.
At this point, you should note that most insurers deduct 2 years NCB for each and every claim you make.
• Firstly, take the amount of excess that applies to your policy.
• Next add the additional insurance premium you will be required to pay over the next 2-3 years

For example:

• You had an accident in July 2008, no other vehicle or people were involved but your car was damaged
• In October 2007 you paid £400 for your annual insurance policy.
• Your policy excess is £125.
• You had 3 years no claims bonus at your last renewal.
• Your NCB will reduce from 50% to 30% if you claim

At your next renewal in October 2008 you will therefore lose 20% NCB which equates to £80 in monetary terms (£400 x 20%).

At your renewal in 2009 you will have gone back up to 2 years no claims bonus so your NCB entitlement will be 40%. This equates to £40 (400 x 10%)

The real cost:

The real cost therefore if you claim from your insurer will be:-
£125 (policy excess) + £80 (additional cost due to reduced NCB at next policy renewal) + £40 (additional cost at renewal in 2009 = £245
From this example you will see that if the cost of repairs is less than £245, it is not technically worth claiming through your insurance company unless you are not in a position to pay for the repairs yourself.
Finally, don’t forget, like everything else, premiums are rising so you may want to adjust the figures mentioned above to reflect this

There is nothing worse than something happening resulting in you wanting to submit a claim to your insurance company to find out that it was not an insured risk.

It is human nature to fly off the handle, blaming the insurer, thinking they are trying to deny you a legitimate entitlement to recovering the cost for the damage; happy to take your money, but never prepared to pay anything out!

Insurance at its most basic, can best be defined as a contractual agreement between a policyholder and insurance company whereby the insurance company will compensate the policyholder in the event of them suffering an insured loss in exchange for a periodic payment.

The words “insured loss” are the key here.

You really need to confirm your understanding of what you are actually covered for when you take out any insurance policy, not just car insurance. Most people just take it out because they have to by law without verifying their cover!

It’s no good blaming your insurer. They have to, by law, supply you with an insurance contract detailing what is and isn’t covered. Insurance Companies are well versed in writing these legally binding contracts and adept at managing risk.

Not understanding your policy or claiming no-one told you are not considered acceptable excuses in the eyes of the law!

It is your responsibility to ensure you understand your policy and ensure it meets your requirements.

Make sure you know what your policy covers you against, and ask your insurer for clarification on anything you don’t fully understand.

Owning a classic car is becoming more popular , sometimes we buy them because we’ve always wanted one but could never afford it previously, other times as an investment.

 
Generally, classic car insurance policies cost less than for insurance for the modern cars. This is due to the fact that most will really look after the car, keeping it garaged when not in use and will not use the car for everyday use thereby only driving say a few thousand miles a year.

Premiums can still vary significantly, so it still needs a little research to ensure you obtain the right cover for you at the right price! Think about obtaining a valuation certificate from a specialst classic car dealer for your car on a regular basis.

 
Values can vary significantly from year to year and you don’t want to be left underinsured. Insurance companies will not hesitate to restrict payout in the event of an insurable claim should this be the case.

 
Beware, it is quite likely that if, at the time of the claim, your vehicle was actually worth 25% more than the value you insured it for on your policy, your insurer may decide to pay out only 75% of the insured  valuation. They will not pay out up to the value you had insured it for!

 
Therefore, check whether your insurer will permit you to increase the agreed valuation each year.
Consider restricting the mileage you will do in the car. This can often be set at anything between 1,500 and 10,000 miles and you can expect to realise some good saving on the premium if you keep the mileage really low at say 1,500 – 2,500 miles a year.

 
If you think you are likely to exceed it in any 1 year, find out whether this mileage restriction can be adjusted.

Many years ago insurance companies started to recognise that ladies are less of a risk than men when it comes to car insurance. As a result, insurers started to offer discounts for female policyholders and they can now find some really good motor insurance deals.

 
Why?

Well, statistics clearly display the reasons:
• Government statistics show that men receive more driving offences receiving more than 90% of the convictons in the UK.
• Again, more than 90% of all convictions for dangerous driving are given to men.
• Although women have as many accidents as men, they are generally less serious, and settlement costs are lower than accidents involving men.
• Women drivers don’t generally drive as fast, as far, or as often as men.

How to take advantage

 
• Look to buy a car with a smaller engine – say a 1.0 – 1.2 litre – these cars tend to have a lower car insurance group rating. Avoid buying performance cars.
• Avoid buying cars which have been modified. Alloy wheels are a good example – they look lovely but if you think about it, if there were 2 cars parked next to eachother, the only difference being 1 has had a lovely set of alloys fitted to it. It is more likely that a thief will select the vehicle that looks better – the one with the alloy wheels!
• Look out for additional security features on the car such as alarms and/or immobilisers – insurers tend to offer discounts for vehicles fiitted with these.
• If you don’t use the vehicle often, tell the insurer – you could get a discount for lower annual mileage
• It’s always nice to help your children out, but if you are a parent, make sure you look carefully at the cost of including children on your policy – you may help them to get on the road but it may be a false economy – find out the cost of them taking out a policy in their own name on their own vehicle – they will earn their own bonus quicker.