Vehicle Insurance

The Law

The registered keeper of a vehicle must make sure it is insured unless the vehicle is declared off the road with a Statutory Off-Road Notification (SORN) (see later in this section).

Under Continuous Insurance Enforcement (CIE) rules, the registered keeper will be contacted if their vehicle appears to be uninsured. If they fail to act and insure the vehicle, they risk:

  • A £100 fixed penalty fine

  • Court prosecution and a fine of up to £1,000

  • The vehicle being clamped, seized, or destroyed

It’s also the driver’s responsibility to ensure they are insured to drive the vehicle they are using. Police can now identify uninsured drivers using Automatic Number Plate Recognition (ANPR) cameras linked to the Motor Insurance Database.

Penalties for driving without insurance include:

  • An unlimited fine

  • 6 to 8 penalty points on your licence

  • Having your vehicle seized and destroyed

You can arrange motor insurance online or in person through an insurance company, broker, or other provider.

Types of Insurance

Third-Party

This is the minimum legal requirement and usually the cheapest option.
It covers:

  • Injury or damage caused to other people or their property
    It does not cover:

  • Damage to your own vehicle

  • Injury to yourself

Third-Party, Fire and Theft

Provides the same cover as third-party insurance, plus protection if your vehicle is stolen or damaged by fire.

Comprehensive

This offers the widest level of cover.
In addition to third-party protection, it also covers:

  • Damage to your own vehicle, even if you were at fault

  • Additional benefits, such as cover for items inside the vehicle (depending on the policy)

Although it’s generally the most expensive, comprehensive insurance offers the best protection.

Cost of Insurance

Insurance premiums vary depending on several factors, including:

  • Your age (younger drivers, especially under 25, usually pay more)

  • Completion of the Pass Plus scheme

  • Your driving experience

  • The make, model, and power of your vehicle

  • Where you live and keep your car overnight

  • How and when you use your vehicle (especially with telematics insurance)

  • Any convictions or penalty points

  • Your no-claims discount (NCD)

Prices differ between insurers, so it’s always worth comparing quotes.

You must answer all questions on your insurance application honestly. If your insurer discovers false information, your policy can be voided, leaving you uninsured and at risk of prosecution.

One common example of fraud is ‘fronting’ – when a less experienced driver (such as a young person) names an older, more experienced driver as the main user to reduce costs. This is illegal, and insurers actively check for it.

Telematics (Black Box) Insurance

Telematics insurance, also known as black box insurance, calculates premiums based on how and when you drive.

A small device (the “black box”) is fitted in your car to monitor speed, braking, acceleration, and driving times using GPS technology.

  • Safe driving can lead to lower premiums.

  • Poor driving behaviour may result in higher costs.

This option can be especially useful for new or young drivers looking to reduce premiums.

What's Covered

Each insurer’s policy differs, so always read your insurance documents carefully and ask your insurer or broker to explain anything unclear.

Most policies require you to pay an ‘excess’ – a contribution towards the cost of any claim. Excess amounts are usually higher for young or inexperienced drivers.

Tip: Before driving someone else’s vehicle, check your cover carefully. Many policies only provide third-party cover – or may not cover you at all.

Insurance Documents

Certificate of Insurance

This document confirms your insurance cover and includes:

  • The names of insured drivers

  • The vehicle covered

  • The period of insurance

  • The permitted uses of the vehicle

  • Whether you’re covered to drive other vehicles

You may receive a temporary certificate or cover note while waiting for the full document. Cover notes usually last up to one month.

Producing Your Certificate

You must be able to produce your insurance certificate:

  • If requested by the police

  • If you are involved in a collision

Keep it in a safe place and easily accessible.

The Policy Document

This contains the full terms and conditions of your insurance contract and explains how to make a claim. Insurers also provide a summary of cover outlining the main features.

If anything is unclear, ask your insurance company or broker for clarification.

QUICK NAVIGATION

BACK TO CHAPTER