Lesson 13. Car insurance

среда, 18 июля 2018 г.

Lesson 13. Car insurance

The law says you must have car insurance if you drive on public roads.

The car insurance will pay out money if you injure or kill somebody or damage another person’s property.

The two main types of car insurance are:

Third party, fire and theft

This does not provide much cover for your own vehicle but will deal with the other person if you are responsible for the damage.

Fully comprehensive

This provides full cover for your own vehicle and any other vehicle involved.

Cost

The amount you pay for car insurance depends on several factors:

– the value of your car

– where your live

– your age

– if you have made a claim on the car insurance in recent years

No claims bonus

The amount you pay is reduced by 10% each year you do not claim on your car insurance. The biggest discount you can usually have is 60% which is a considerable saving. This percentage reduction is called the ‘no claims bonus’.

The bonus is lost if you make a claim on your car insurance then you build up the bonus again over the next few years. Some people pay extra to protect their ‘no claims bonus’.

Payments

Some people pay the annual (yearly) cost of their car insurance in one payment but many people spread the cost over 12 equal monthly instalments.

EXAMPLE:

This year Karen’s fully comprehensive car insurance quote is £700. She gets a 60% no claims bonus and wants to pay 12 equal monthly instalments. How much is each monthly payment (to the nearest penny)?

No claims bonus = 60% of £700 = £420

Amount to pay = £700 – £420 = £280

Monthly payment = £280 ÷ 12 = £23.33 (to the nearest penny)

Test lesson 13