In the UK, car insurance is a legal requirement if you have a car or are intending to buy or lease one.
With quotes that range from a few hundred pounds for those lucky few with dedicated no-claims bonuses, to thousands of pounds per year for the poor 18-year old in his brand-new BMW – car insurance is a huge chunk of the expense of owning a car.
But have you ever thought how you might be without it?
It is actually possible to self-insure. No premiums to pay, just the willingness to cover the costs of any accident yourself. Sounds tempting, doesn’t it? Especially if you are a careful driver who hasn’t had a collision in years.
Ignoring the fact that you need to prove you can pay for your insurance by lodging £500,000 with the Accountant General of the Senior Courts any time you are out in your car, there’s still the very real fact that driving with your own money on the line is going to be very nerve-wracking indeed.
It’s easy to see the immediate cost of a car accident. There’s the repair bill for the damage done to their car, and yours, of course. That can become quite the expense once you take into account any underlying knock-on effects to the car – you might have just crunched relatively lightly into the door, but you didn’t realise that in doing so, you damaged the airbag system and the electronics that open and shut the window.
It gets even more acute after you see the bill for matching paint colours to restore the vehicle to its original factory sheen.
That’s the thing – when someone is involved in an incident that wasn’t their fault, they have the right to have themselves and their possessions fixed to return to the state they were in before the accident happened. If that means a shiny pearlescent coat of blue paint, then that’s what you (the cause of the accident) have to pay for.
Then there’s the road itself. You need to take into account the costs for:
What about the costs of towing away the damaged vehicles? Yup, all on you.
An important part of car insurance is the section dedicated to liability insurance – this covers any court fees and compensation for injury.
If something bad happened to another person due to your collision, they are entitled to reasonable compensation. What if you broke someone’s leg and they were unable to work for three months as a consequence? What if that person was a professional footballer?!
The number of costs associated with a car accident can be quite staggering. It’s easy to assume it’s just a few hundred pounds to fix a car door, but it soon mounts up. Even if there was no one else involved in your collision, the costs of replacing a street sign and a fence are not inconsiderable.
Your insurance company covers all this, of course. That monthly or annual premium that caused you so much contention and complaint at the start of this article starts to look paltry now, doesn’t it!
£200 a month? Sure – sign me up! It’s a bargain!