By Michael Challiner
Get ready for an avalanche of “new style” car insurance
policies to hit the market. One of the first insurers to enter
the fray is Tesco, with the announcement of its new “no
policy. Where Tesco leads, others will swiftly follow in their
search for new customers.
The AA doesn’t seem too impressed with Tesco’s offering,
that the excess is really high and if you look around you
buy the usual fully comprehensive for the same price. Taking
the opposite stance is Norwich Union who believes that other
insurers will compete with simple, non-gimmicky, cover.
ahead of the competition, they have been watching the patterns
of 5000 motorists over a two year period and they are starting
to offer new policies based on their research.
Both of these insurers will aim to keep at the top of the
Buy” tables and the resulting competition between insurers to
keep the premiums low and gain the business will be
What is it that’s so different about these new policies?
First of all there’s Tesco’s new “Value” car insurance. This
a type of “hybrid”, coming higher in the scale of cover than
basic third party but stopping short of the more usual fully
comprehensive. For example, if your car is off the road, you
won’t get a courtesy car, it doesn’t cover young drivers and
£475, the excess is much higher than usual. Your no-claims
discount will not be protected and if repairs are needed these
can only be carried out by designated garages. Normal
guarantees on repairs are three years, but they have reduced
this to only 12 months. If you can accept these restrictions,
Tesco say there will be a saving of 12% on its standard cover.
Another proviso is that you must buy cover on-line.
On offer from Norwich Union is a young driver’s policy. Not
available to new customers for the time being, customers are
charged according to their driving patterns. It has been found
that younger drivers have a higher likelihood of accidents at
night and so there is a charge of £1 each time they drive
between the hours of 11pm and 6am.
Direct Line, not to be outdone, has similar new products
on to the market.
It all sounds slightly confusing and you have to consider what
you’re missing out on in the way of cover. It is possible for
the more conventional fully comprehensive policy to be reduced
if you’re willing to sacrifice some of the cover or pay a
higher excess. These deals are available on-line and easily
accessible, but why tie yourself to one company? If you search
on the internet for a car insurance broker and are specific
about your needs, they’ll do the research and come up with the
right deal for you.
Older drivers have car insurance problems too. The Government
may be considering whether regular eyesight and certain other
medical checks should be carried out three yearly. The
Association of British Insurers have requested this as they
feel that with declining eyesight and age, responses could be
slower and therefore older drivers could be more at risk of
accidents. Age Concern, a charity representing the elderly,
argues against this, believing that fitness to drive should be
based on skill, not age.
The Association of British Insurers report that in fact older
drivers have more accidents per mile than drivers in middle
and also state that there is a higher likelihood of injury or
death resulting from a crash, both for them and other road
>From the age of 60, car insurance premiums will start to rise
as underwriters begin to get wary of taking on new clients.
AA tell us that, as an example, a woman of 21, who pays a
premium of £326, will find it reduced to £197 at 60, but by
time she reaches 80 the cost will be £460. There are policies
designed to serve the needs of older people, Age Concern, Saga
and Help the Aged are just three of them, but again, if you
contact an on line broker, they’ll have all the facts and be
able to offer help on this.
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