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Car Insurance Q&A


Posted on Thursday, April 14, 2016

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At Budget Insurance, we know that insurance can sometimes be tricky to understand so we have answered a list of some of the commonly asked questions we receive about car insurance. 

How’s my car insurance premium calculated?

Numerous factors are taken into account, for example, the make and model of your car, where you live, where you keep your car at night, who drives the car, what you use the car for and your previous claims history.

Because your premium is calculated on these factors, amongst others, it is very important that you disclose all information when answering these questions. If you are not sure about an answer, rather tell the consultant and get back to them later.

An important consideration is the fact that some cars are more susceptible to theft than others. A very common car model on the roads is easy to obtain parts for, so it is likely to be a greater target for theft. Also taken into account is the safety record of the model you are insuring, plus the cost to repair or replace it. Other factors such as whether you use the car for business or personal use also affect your premium.


What type of car insurance can I get?

There are three main types of car insurance available - comprehensive, third party, fire and theft and third party only cover

Comprehensive car insurance will cover your car against any accidental damage, if it is stolen and against damage caused to someone else’s property.

With third party, fire and theft insurance, you may claim for certain specified damage to your car, such as fire damage or if it is stolen. With such cover, accident damage to your vehicle is not covered but the damage caused to a third parties’ property is covered.

Third party only insurance means that you can only claim for the damage you cause to other parties’ property.


I’m worried about vandalism and damages – what type of car insurance product do I need?

Comprehensive car insurance will cover your car against any accidental damage to your car, if it is stolen and if your car cause damage to someone else’s car.


I wasn’t driving my car at the time of the accident; will I still be paid-out?

If you disclosed the regular driver of the car correctly but lend your car to someone else and they crash it, you will have cover subject to the same conditions applicable to yourself. However, you’ll have to pay a higher excess.


How does my driving record affect my insurance premium?

If your licence was ever endorsed, you will not be able to get insurance. Also, if you claimed recently, then your premium will be higher. If you have claimed a lot, you may not be able to get cover.


Do I insure my car for Personal or Business Use?

Your insurance policy sets out the uses for which your car is insured. If you have told your insurer that you only use your car for personal use and for driving to work and back, then this is what you will be insured for.

If you are involved in an accident while using the car for business purposes and are only insured for personal use, then your insurer is able to reject your claim and you will find yourself footing the bill for the repair cost.

The type of insurance you need for your car will be determined by the following criteria:

  • If you use your car for personal use and to drive to and from work only, then you can insure the car for private or personal use.
  • If you occasionally use the car for business purposes, for example, driving to one or two meetings per month, then you will be adequately covered on a limited business use insurance policy.
  • If however you rely on your personal car to conduct business, for example as a sales representative or financial consultant who  goes to see clients away from the office, then you will need to be insured for full business use.


Insuring your car for business use may add on an extra percentage cost to your premium but this will ensure you have peace of mind that should you have an accident while using your car for business you will be correctly covered.

The best thing to do is talk to your insurance company, who will be able to advise on which policy is right for you, depending on your needs and usage.