We all need car insurance to drive on the road, but finding the right kind of coverage can be difficult. This guide aims to give you a better understanding of the basics and help you make a more informed choice when choosing a policy.
How does car insurance work?
Car insurance pays if your car is stolen, vandalized, set on fire, or you are in an accident. At the very least, it protects you from any damage you cause to other road users, the public, or their property – known as third parties.
You only need to claim your policy when an accident is to blame. If another driver is at fault, their insurance should pay in return. Learn more in our guide on how to claim.
Do I need car insurance?
Yes. It is illegal to drive on British roads without it.
If you drive without car insurance, you could face a fine of up to £ 1,000 or have your vehicle seized and destroyed. The GOV.UK website has more details on the penalties you may face.
The only time you do not need to insure your car is if you officially declare that it is not used by an off-road legal notice (SORN). However, the vehicle must be kept on private land, and not on any public road.
What does car insurance cover?
Car insurance protects you from financial losses, but the level of protection depends on the type of policy you choose.
If you have an accident, your insurance company will cover the costs. All you have to pay is the surplus – a fee determined by the insurance company – plus any voluntary surplus, which is an extra amount you set. If you apply, your premiums can increase.
Car insurance is available at different levels, and the level you choose will determine how much of your costs are covered by your insurance company.
What are the types of car insurance?
There are three levels of car insurance coverage:
Sometimes called “Comprehensive” or “Full to Work”.
Key Features: Covers you, your car, your passengers and property, as well as any third parties involved in the crash. Protects your car against vandalism and theft as well.
Suitable for: Most drivers. Three-quarters of UK drivers choose composite clothing because it offers very complete protection. Some comprehensive policies will allow you to operate other cars, but not all.
Third party, fire and theft car insurance
Occasionally short to TPFT.
Key Features: Covers the third parties involved in the accident, but also protects your car against damage caused by theft and fire. It will not pay for your vehicle to cover the damage done after an accident or vandalism.
Suitable for: Those looking for a cheaper policy, although comprehensive insurance can still cost less. Check out our guide on wearing different levels.
Key Features: This is the most basic level of car insurance and covers any liability for any injury to others and to third party property only. This level of cover is the least legal requirement for motorcycles in the UK.
Suitable for: Drivers who often drive, or who are looking for the cheapest possible clothing. Not all insurance providers offer this type of policy. It’s not always cheap.
Other types of auto insurance
There are different types of auto insurance, designed for certain drivers or vehicles. These include:
Multi-car insurance – helps families claim discounts on multi-car insurance from one insurance company
‘Black box’ insurance – suitable for new or newly qualified drivers looking for affordable auto insurance by checking their driving behavior using a telematics tool.
Driver’s auto insurance – coverage for new drivers, considered by auto insurance companies to be high risk drivers
Student auto insurance – auto insurance that covers you until you have passed your driving test
Taxi insurance – taxi drivers face higher premiums because they drive longer hours at a time
Short term auto insurance – temporary coverage for driving a few days or hours
How long does an auto insurance policy last?
Most car insurance policies take one year, although you can choose to cancel your policy before the cancellation fee, which is around £ 55. Learn more about pricing and canceling your policy in our policy guide.
If you need auto insurance for a short period of time, you can purchase a short term policy that can only last for a day or a few weeks. Our guide to temporary auto insurance has everything you need to know.
How Much Money Does a Car Insurance Make?
The cost of your coverage falls into one thing: an opportunity.
If you have been identified by an insurance company as a high-risk driver, you will find that you are at risk of an accident and file an expensive claim, which will increase the cost of compensation.
Auto insurers will use the following to determine your risk information.
The car you drive
Your car: It costs more to insure a new car because repair bills are higher. Also, some older cars have lower safety features and cost more to insure.
Machine Size: The general rule is that the larger your machine, the higher your insurance premium. The smallest cars to insure are small cars and small machines.
Adjustments: Changes related to the work done on your car (e.g. engine modifications or spoilers) increase the cost. Drivers with these upgrades are more likely to claim, will cost more to repair, so will pay more for your coverage.
Accommodation: Where you live and where you park your car will affect your cost. If you live in a crime-prone area and your car is on the road, you live in a safer, less crime-prone area and it costs more than keeping your car in a locked garage.
Your age: Car insurers are older and pay more for younger drivers. Younger drivers are more likely to be involved in accidents, and other young people are injured, resulting in higher costs for claims. According to the latest statistics, the cost of car insurance for 17-year-olds is 9,911, while the average cost for 18-year-olds is £ 2,091