UK Car Insurance: Absolutely everything you need to know

There is no escaping it; car insurance is a legal requirement for all UK drivers. If caught, you could get a £300 fixed penalty and six penalty points on your licence, and if the case goes to court, you could get an unlimited fine and be banned from driving. But it's not just about the penalties. Car insurance aims to protect drivers financially in case of an accident or theft.

Types of Car Insurance

There are three main types of car insurance in the UK:


  1. Third-party insurance: This is the minimum level of coverage required by law. It covers damage to other people's property or injuries to other people, but it doesn't cover damage to your car.

  2. Third-party, fire and theft insurance: This type of insurance covers the same as third-party insurance but also includes protection against theft of your vehicle and damage caused by fire.

  3. Comprehensive insurance: This is the highest level of coverage and covers everything that third-party, fire and theft insurance does, as well as any damage to your vehicle.


The cost of car insurance varies depending on various factors, including the driver's age, driving experience, location, and vehicle type. Young drivers and their example, youngish previous driving convictions, may face higher insurance costs.


When purchasing car insurance, shopping around to find the best deal for your needs is essential. You can compare prices and policies from different providers using online comparison sites or speaking to an insurance broker.


In an accident, you must contact your insurance provider immediately to report the incident. Provide them with details of the accident and any damage caused? Your insurer will then assess the situation and determine if you are eligible for a payout to cover the cost of any damage or injuries.


It's important to note that driving without insurance is illegal in the UK and can result in fines, penalty points, and even a driving ban.

What type of car insurance should you get? 

The car insurance you should get depends on your circumstances and needs.


If you're on a tight budget and want to keep your insurance costs as low as possible, third-party insurance is the minimum level of coverage required by law. It will provide essential protection against damage to other people's property or injuries to other people, but it won't cover any damage to your car.


If you're worried about your car being stolen or damaged by fire, consider third-party fire and theft insurance. This type of policy offers the same protection as third-party insurance but covers you if your car is stolen or damaged by fire.


To be fully protected and have peace of mind, you should consider comprehensive insurance. This policy covers everything third-party fire and theft insurance does and any damage to your vehicle.


Remember, the cost of car insurance will depend on several factors, including your age, driving experience, location, and the type of car you drive. So, you should be able to compare prices and policies from different providers to find the best deal for your circumstances.


Ultimately, the type of car insurance you choose should reflect your personal needs and your budget. You may also want to consider any additional coverage options, such as breakdown cover, legal expenses cover, or personal injury protection.


How can I reduce my car insurance premiums?

Car insurance premiums can be expensive, but there are some steps you can take to reduce your costs:

  1. Increase voluntary excess: Agreeing to a higher voluntary excess can lower your insurance premium. However, be sure you can afford to pay the lot if you need to make a claim.

  2. Choose a smaller or less expensive car: Cheaper cars to repair or replace are typically less costly to insure. Consider downsizing to a smaller car or choosing a make and model with a lower insurance group rating. More on this later.

  3. Build up your no-claims bonus: The longer you go without making a claim, the more no-claims bonus you accumulate, which can result in a lower insurance premium.

  4. Add a named driver: Adding an experienced designated driver to your policy can reduce your premium, as they are seen as less of a risk than a new or younger driver.

  5. Improve your car's security: Installing an approved alarm, immobiliser, or tracking device can lower your insurance premium by reducing theft risk.

  6. Pay annually: Paying for your insurance in one annual payment rather than monthly instalments can sometimes result in a lower premium.

  7. Shop around: Don't just accept your renewal quote; shop around and compare prices from different insurance providers. Use online comparison sites or consult an insurance broker for the best deal.


Remember, it's essential to balance the cost of your car insurance with the coverage you need to protect yourself financially. So, it's always a good idea to read the terms and conditions of any insurance policy carefully before purchasing to ensure it meets your needs.


Which types of cars are cheaper to insure?

The cost of car insurance is influenced by many factors, including the type of car you drive. Generally speaking, cars that are less expensive to repair or replace, have lower horsepower, and are considered safer by insurance providers will have lower insurance premiums.


Here are some types of cars that may have cheaper car insurance:

  1. Small cars: Smaller cars with 1.0 litre or fewer engines are generally cheaper to insure as they are considered less powerful and less likely to be involved in high-speed accidents.

  2. Family cars: Family cars such as saloons, hatchbacks, and estates are often considered safer and more practical than other vehicles and, therefore, may have lower insurance premiums.

  3. Electric cars: Electric cars are typically less expensive to insure than petrol or diesel cars as they are considered safer, less likely to be stolen, and less costly to repair.

  4. Cars with safety features: Cars with advanced safety features such as automatic emergency braking, lane departure warning, and adaptive cruise control may be eligible for lower insurance premiums as they are less likely to be involved in accidents.

  5. Cars with low insurance group ratings are grouped into different insurance categories based on their performance, safety features, and repair cost. Cars in lower insurance groups will generally have lower insurance premiums than those in higher groups. A list of the cheapest cars to insure can be found at Parkers. It's well worth checking this list if you're considering buying a car for a young driver. The low insurance group rating can help reduce the higher premiums for younger drivers.


It's important to remember that car insurance costs are influenced by many factors beyond the type of car you drive, including your age, driving experience, location, and the level of coverage you choose. Therefore, comparing insurance quotes from different providers is always a good idea to find the best deal for your circumstances.


What are the most well-known car insurance companies in the UK?

There are many car insurance companies operating in the UK, but some of the biggest and most well-known include the following:

  1. Aviva car insurance

  2. Direct Line car insurance

  3. Admiral car insurance

  4. LV= car insurance

  5. Churchill car insurance

  6. Saga car insurance

  7. AXA car insurance

  8. Ensure car insurance

  9. Hastings Direct car insurance

  10. Co-op car insurance


These companies offer a range of car insurance products, including third-party, third-party fire and theft, and comprehensive policies. They also often provide additional coverage options such as breakdown cover, legal expenses shelter, and personal injury protection.


When choosing a car insurance provider, comparing prices and policies from multiple companies is vital to find the best deal for your circumstances. It's also a good idea to read customer reviews and ratings to understand the quality of service each insurer provides.


Are there different car insurers that cater for women, young drivers, students and classic cars?


Yes, car insurance providers cater to different groups of drivers, including women, young drivers, students, and classic car owners.


For women, some car insurance providers offer policies tailored to female drivers, with specific features and benefits such as handbags, child seat covers, and no increase in premiums for having a baby. In addition, women-only insurers may offer additional services such as breakdown cover and legal protection.


For young drivers, specialist insurers offer features such as 'black box' telematics policies that monitor driving behaviour to offer lower premiums to safer drivers. In addition, some insurers may provide learner driver policies and short-term cover for young drivers.


For students, some insurance providers offer policies specifically designed for student drivers, with features such as flexible payment options and policies procedures to be adjusted or cancelled to fit university terms and holidays.


For classic cars, there are specialist insurers who offer policies that are tailored to the specific needs of these vehicles. Features may include agreed-value cover, replacement spare parts, and classic car insurance at events.


It's always a good idea to compare quotes from multiple insurers to find the best deal for your circumstances, regardless of age, gender, or vehicle type. Also ensure that any policy you choose gives you the coverage you need to protect yourself financially.


How do I find the best car insurance policy online?

Finding the best car insurance policy online can be a time-consuming process, but here are some tips to help you narrow down your search and find the right approach:

  1. Determine your needs: Before starting your search, decide what level of cover you need and any additional features you may want, such as breakdown cover or legal expenses cover. This will help you narrow your search to policies that meet your needs.

  2. Use comparison sites: Comparison sites can be a quick and easy way to compare quotes from multiple insurers. Use reputable sites and compare policies based on their features, not just their price.

  3. Check individual insurers' websites: Some insurers may not be listed on comparison sites, so it's worth checking them for quotes and information on their policies.

  4. Read reviews: Look for reviews and ratings from other customers to get an idea of the quality of service each insurer provides. This can help you avoid insurers with a poor reputation for customer service.

  5. Ask for recommendations: Ask friends and family for recommendations, as they may be able to suggest insurers that they have had good experiences with.

  6. Consider customer service: Make sure the insurer you choose has good customer service and is easy to contact if you need to make a claim.

  7. Don't just focus on price: While price is essential when choosing a policy, there are other considerations. Read any policy's terms and conditions carefully to ensure it provides the level of coverage you need.


Which comparison sites should I use?

Many car insurance comparison sites are available in the UK, each with unique features and benefits. Here are some popular comparison sites you could use:

  1. Compare the Market: This site offers various insurance comparisons, including car insurance. They also offer rewards for using their site, such as 2-for-1 cinema tickets.

  2. Confused.com: This site offers a free comparison service for car insurance and other types of insurance. They also provide additional services, such as a breakdown cover comparison.

  3. Money Supermarket: This site offers a comprehensive comparison service for car insurance, with additional features such as a no-claims discount checker and a car valuation tool.

  4. GoCompare: This site offers a quick and easy comparison service for car insurance and other types of insurance. They also provide additional features such as a fuel cost calculator and a car tax checker.

  5. Uswitch: This site offers a comparison service for car insurance and other insurance and utilities. They also provide additional features such as a car insurance guide and glossary.


Remember, shopping around and comparing policies from multiple insurers is the best way of finding a good deal for your circumstances. Unfortunately, some insurers, like Direct Line, don't work with insurance aggregators or comparison sites, so you must go to those directly to cover the whole market. Direct Line is especially worth checking if you want to insure two or more cars in your household, as its multi-car policy is often highly competitive.


Also, feel free to call and ask questions and ask for advice if you need clarification on any policy aspect.


What should I do if I'm involved in a car accident?

If you're involved in a car accident, here are the steps you should take:

  1. Stop: If you're involved in an accident, you must stop, no matter how minor the incident is.

  2. Safety first: Ensure the safety of yourself and others involved in the accident. Turn off your engine and turn on your hazard lights. If anyone is injured, call for medical help immediately.

  3. Exchange details: Exchange details with the other driver involved, including names, addresses, phone numbers, car registration numbers, and insurance details.

  4. Gather evidence: Take photos of the accident scene and the damage to the cars involved. If there are any witnesses, could you take their details too?

  5. Inform your insurer: Contact your insurance provider immediately and report the accident. They will advise you on what to do next.

  6. Note what happened: Write down a summary of what happened, including the time and location of the accident, weather conditions, and any other relevant details.

  7. Seek legal advice: If you are injured or have a dispute over who was at fault, you may need legal advice.


Staying calm and polite is important, even when angry or upset. Don't admit fault or offer to settle the matter on the spot, as this could affect your insurance claim. Instead, you can follow the above steps and let your insurance provider handle the case.


Other frequently asked questions about UK car insurance.

  1. What is a no-claims bonus?

A no-claims bonus, also known as a no-claims discount, is a discount on your car insurance premium that you earn each year you do not claim on your insurance policy. The longer you go without claiming, the more significant your discount can be. Again, it's a reward for safe and responsible driving.


  1. Can I drive someone else's car on my insurance?

This depends on the type of insurance policy you have. For example, some comprehensive policies include a 'driving other cars' clause that allows you to drive someone else's car with their permission. However, this is only sometimes the case, and you should check your policy to see if this is covered if you are okay with it.


  1. What is voluntary excess?

Voluntary excess is an amount that you agree to pay towards the cost of any claim you make. The higher the excess you agree to pay, the lower your car insurance premium. It's a way to reduce your premium costs, but you should only choose an amount you can afford to pay in case of a claim.


  1. Can I get temporary car insurance?

Yes, temporary car insurance is available in the UK for one to 28 days. It can be helpful if you need to borrow a car for a short period or if you're visiting the UK and need to drive a vehicle.


  1. What is black box insurance?

Black box insurance, or telematics insurance, is a type of car insurance that uses a device installed in your car to monitor your driving behaviour. The widget tracks your speed, braking, and acceleration and sends this data to your insurance provider. Depending on how you drive, your insurance provider may offer you a discount on your premium or increase your premium if you drive recklessly. It can be a good option for young or inexperienced drivers who want to prove their safe driving habits to their insurance provider.


  1. What is a no-fault claim?

A no-fault claim is a claim you make on your insurance policy for damage to your car or injuries to yourself or your passengers, regardless of who was at fault for the accident. It's common in some insurance policies, such as comprehensive coverage.


  1. What is the difference between voluntary and compulsory excess?

A compulsory excess is an amount set by the insurance provider that you must pay for any claim you make. A voluntary excess is an additional amount you choose to pay towards the cost of any claim on top of the compulsory excess. A higher voluntary lot can reduce your insurance premium, but it also means you'll have to pay more if you make a claim.


  1. Can I cancel my car insurance policy early?

Yes, you can cancel your car insurance policy early but you may have to pay a cancellation fee. The fee amount depends on your insurance provider and the terms of your policy. So, check the terms and conditions of your policy before you cancel it.


  1. What is the difference between a named driver and an additional driver?

A named driver is named on your insurance policy and authorised to drive your car. An additional driver is not named on your policy but can drive your vehicle with your permission. Check your policy to see what is allowed. In some cases adding a named driver can increase or decrease your premiums.


  1. Can I transfer my no-claims bonus to a new policy or provider?

You can usually transfer your no-claims bonus to a new policy or provider. However, the discount amount may vary depending on the terms and conditions of your new policy or provider. So, you'll need to check with your new insurer to see if they accept no-claims bonuses and how much discount you'll receive.


Car Insurance Glossary

  1. Black box - A telematics device that monitors your driving behaviour to offer lower premiums to safer drivers.

  2. Bonus accelerator - A policy that allows you to build up your no-claims bonus more quickly.

  3. Broker - An intermediary who can help you find and purchase insurance policies from various providers.

  4. Certificate of insurance - A document that proves you have car insurance and provides information about your coverage.

  5. Claims adjuster - A person who investigates and settles insurance claims.

  6. Claims history - A record of any claims you have made on previous insurance policies.

  7. Comprehensive insurance - The highest level of coverage available, which protects damage to your vehicle and other vehicles and liability for injuries and property damage to others.

  8. Compulsory excess - An amount set by the insurance provider that you must pay towards any claim's cost.

  9. Cooling-off period - A period during which you can cancel your insurance policy without penalty.

  10. Excess - The amount you must pay towards any claim you make on your insurance policy.

  11. Green card - An international certificate of insurance that provides proof of insurance coverage when driving in certain countries outside the UK.

  12. Group rating - A system used to determine the insurance group for a particular make and model of a car based on factors such as the cost of repairs and safety features.

  13. Insurance premium tax (IPT) - A tax applied to insurance premiums in the UK.

  14. Legal expenses cover - An optional extra that covers legal costs in case of a dispute related to your car insurance.

  15. Liable - Responsible for an accident or incident.

  16. Market value - The value of your car during an accident, considering its age, mileage, and condition.

  17. Named driver - A person named on your insurance policy and authorised to drive your car.

  18. No-claims bonus (NCB) - A discount on your insurance premium for each year you do not claim on your policy.

  19. No-fault claim - A claim you make on your insurance policy for damage to your car or injuries to yourself or your passengers, regardless of who was at fault for the accident.

  20. Personal injury cover - Cover for injuries sustained in an accident.

  21. Policy - A contract between you and your insurance provider that outlines the terms and conditions of your coverage.

  22. Premium - The amount you pay your insurance company for your policy.

  23. Protected no-claims bonus - An optional extra that allows you to make a certain number of claims without losing your no-claims bonus.

  24. Renewal notice - A letter or email from your insurance provider that notifies you when your policy is due for renewal.

  25. Telematics insurance - Insurance uses a device installed in your car to monitor your driving behaviour.

  26. Third-party insurance - The minimum level of cover required by law, which provides protection from liability for injuries and property damage to others but does not cover damage to your vehicle.

  27. Total loss - When the cost of repairing your car exceeds its market value or when it is stolen and not recovered, resulting in a write-off.

  28. Underwriter - The person or company responsible for assessing risk and determining the terms and conditions of your insurance policy.

  29. Uninsured driver cover - Cover that protects if you are involved in an accident with an uninsured driver.

  30. Voluntary excess - An additional amount you choose to pay towards the cost of any claim on top of the compulsory excess.