The UK, in general, has a number of policies in place designed to protect its residents, such as a National Insurance number and the NHS. Compulsory car insurance is another of those measures.
While many residents of London and other UK cities seem to be perfectly happy not owning a car, there are large number of residents in those cities and elsewhere in the UK who do desire or need a car. Some jobs also require their employees to drive on a regular basis.
So, if you desire to drive, or driving is a necessary part of your employment, it is necessary to learn the basics of UK car insurance. Before shopping for insurance, it is important to make sure you can legally drive in the UK. Most of the time the answer to that question is “yes”, at least for one year.
Visitors from the EU or EEA with a valid licence can drive for as long as they remain in the country, unless they become resident. Those coming from outside those areas can drive for one year. EU and EEA drivers who take up residency in the UK can drive with their original licence for three years or until they are 70, whichever is longer.
Types of Insurance
As we noted, insurance is compulsory if you own a car. This applies even if you keep the car in a garage for long periods of time. Enforcement of the law is a priority. The penalties can be severe with the basic fine for not having insurance being a £200 penalty plus six penalty points. The maximum fine can be as high as £5000 plus the loss of driving privileges. Police also have the authority to seize and even destroy the vehicle.
The type of cover you select depends on a number of factors. There are three types of cover:
- Third Party Cover
Third party cover is the most basic and satisfies the minimum legal requirement. Third party insurance pays out if you injure another person or damage someone’s property. It offers no payment for personal injury or for damage to your vehicle.
- Third Party Fire and Theft
The second level of cover is third party fire and theft. You receive the same level of protection for the damage you cause to someone’s property and for their injury. Your car is also protected if it is stolen, damaged or destroyed by a fire. It does not protect you from damage to your vehicle due to an accident and it also does not cover personal injury.
Comprehensive is the most popular insurance choice and, generally, the most expensive. Just as the description implies, comprehensive insurance covers you and your car along with the covering others and their property. Comprehensive insurance usually comes with other benefits, such as insurance for legal expenses and rental car reimbursement.
Selecting the best policy depends on a number of factors. One of the most important is the value of your personal vehicle. If your car is older and not very valuable, third party cover is most likely sufficient. If you can is new or has a great deal of remaining value, buying comprehensive cover is the best choice.
The number of brokers and companies offering car insurance is fairly staggering and the cost of insurance can vary dramatically from one company to the next. It pays to shop around and compare quotes before purchasing a policy.
Third party cover will usually be the least expensive, but before selecting, be sure to take a close look at the cost of comprehensive insurance. Often, the difference is minimal when you examine the benefits. Car insurance is designed to protect you from unplanned events. Consider the consequences and out-of-pocket expenses if you have an at-fault accident and have to pay for your repairs yourself and then make your choice.
Online sites such as Money Supermarket and Compare the Market offer a number of comparison tools that will help you find the coverage that is best for you and at the best price. The sites also offer advice on how to look for and obtain discounts.