Car insurance is an insurance policy that can pay out for damage to your vehicle, another vehicle or someone's property. Car insurance is a legal requirement in the UK for road-worthy vehicles and there are different types of car insurance to choose from.
In this article, we look at what car insurance is, why car insurance is mandatory in the UK and how to buy car insurance. We also look at what happens if your car is damaged by an uninsured driver. You can skip to specific sections of the article using the following links:
- What is car insurance?
- What are the different types of car insurance?
- Do I need car insurance?
- Is car insurance a legal requirement?
- How to buy car insurance
- How to claim on car insurance
What is car insurance?
Car insurance is an insurance policy designed to cover the costs if you are involved in an accident where property or a vehicle is damaged. It can also help towards the cost of medical treatment as a result of the accident. Car insurance will also cover the repair costs to your car if you are involved in an accident that is not your fault, depending on the type of policy you have.
If you take out a car insurance policy, you are required to pay an annual or monthly premium to cover the costs. If you need to make a claim you will need to pay an excess on the policy but should not have to cover the costs of any damage if you are suitably insured. If you do not make a claim on your car insurance policy then you will not get any of the policy premium back but you can, however, benefit from building up a no claims bonus which may mean you receive a discount on your policy when it comes to renewal.
What are the different types of car insurance?
There are three main types of car insurance policy which we briefly summarise below. For a more in-depth explanation of the different types, and how they compare, read our article 'What are the different types of car insurance?'
Fully comprehensive car insurance is the most extensive car insurance policy you can purchase and it is usually the most expensive. Some examples of the level of cover you can expect with fully comprehensive car insurance include damage to other vehicles or property, compensation claims, vandalism claims and fire damage.
Third party, fire and theft
Third party, fire and theft car insurance is usually cheaper than fully comprehensive car insurance but more expensive than third party. It generally covers damage to other people's vehicles or property as well as compensation injury claims caused by you. You can also usually expect cover if the vehicle is stolen or if your car is damaged by fire. Damage to your own vehicle or property in an accident is not likely to be covered.
Third party car insurance is the legal minimum requirement for driving on UK roads and is the least comprehensive type of policy. It is also usually the cheapest type of car insurance policy you can buy. Third party car insurance only insures you against damage caused to other people's vehicles or property as well as for any injury compensation claims caused by you. You are not covered for any damage to your own vehicle including theft or fire or for any personal injury claims.
Do I need car insurance?
Car insurance protects you against financial loss as a result of an accident as it can cover the costs of damage to another person's vehicle or property. In addition, depending on the car insurance policy type you have, it can also help to cover the costs of damage to your vehicle.
Is car insurance a legal requirement?
Car insurance is a legal requirement in the UK for roadworthy vehicles. Third party insurance is the 'legal minimum' requirement for driving on UK roads. This means that if anyone else is to drive your vehicle they need to be suitably insured. It is relatively easy to add additional drivers to your policy or you can often get specialist temporary insurance policies.
What happens if you drive uninsured?
If you are caught driving whilst uninsured you could receive a penalty charge of £300 and 6 points on your licence. If the case is taken to court, you could get an unlimited fine and/or disqualified from driving. In some instances, the vehicle could be seized by the police and you will have to pay to recover the vehicle, or it could be destroyed altogether.
If you are caught driving whilst uninsured you will be required to declare any driving convictions when taking out insurance in the future. This means that you could be affected by high policy premiums.
When don’t you need vehicle insurance?
If you own a car that is not roadworthy, you may not need to get it taxed or insured but you will have to apply for a Statutory Off Road Notification (SORN). This only applies if the vehicle you own is off the road and is not in use. Therefore the vehicle cannot be driven or parked on a public road and you must store it on private property. However, one thing that you should consider if your vehicle is registered as SORN and uninsured, is that you will not be able to make a claim if the vehicle is damaged or stolen as you will not be covered by an insurance policy.
Who is responsible for insuring a car?
Typically, the registered keeper is responsible for checking that a car is insured but it is possible to be insured on a car where you are not the registered keeper. You will need to check with each individual insurer, however, as some insurers may not accept you as the main driver of a car if you are not the registered keeper.
Can I drive any car?
If you have a fully comprehensive car insurance policy you may be insured to drive someone else's car. You will need to check your car insurance policy documents carefully, however, as this is not always a clause that is added to every car insurance policy. Additionally, if you have a fully comprehensive car insurance policy, and you are insured to drive another vehicle, it is likely to only be provided on a third party basis. If you need to drive another person's vehicle regularly it would be sensible to consider getting added as a named driver on the policy to ensure you have suitable cover in the event of an accident.
How to buy car insurance
One of the quickest and easiest ways to purchase a car insurance policy is via a comparison site. This is because comparison sites allow you to compare multiple providers at once, ensuring you find the best deal. We have partnered with Quotezone* so that you can search and compare cheap quotes from over 110 UK car insurance providers. One thing to consider, however, is that not all comparison sites are whole of market and you could therefore get a better deal with an insurer directly. In addition, not all insurers - such as Direct Line - are featured on comparison sites.
Ensure you compare like for like policies when looking at car insurance quotes online so that you can make a fair comparison, particularly as some policies include additional extras such as legal and breakdown cover.
How to claim on car insurance
If you need to claim on your car insurance policy you will need to notify your insurer as soon as possible after the accident, even if you are not planning on making a claim. If you have an accident with another vehicle you will need to provide your car registration and name and address, as well as the information from the other parties involved.
What if you are hit by an uninsured driver?
If you have been involved in an accident with an uninsured driver you should notify the police as soon as possible, as well as your insurance company who may be able to offer some advice. If you, your vehicle or your property has been damaged in the accident by an uninsured driver you may be able to claim compensation from the Motor Insurers' Bureau (MIB). More information can be found here.
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