UK law dictates that you need to insure any vehicle before driving it on public roads. Although there are a few different types of car insurance, your legal requirement is set at a minimum level. What kind of policy do you have to take out and is it better to look at more comprehensive cover?
What Is the Minimum Level of Car Insurance in the UK?
If you will be taking a vehicle on the road, you should, at a minimum, insure it for third party cover. This is the legal requirement in the UK. This will protect any person you injure (i.e. other drivers, your passengers or the general public) or any property you damage due to an incident or accident with your car.
It will not cover you or the vehicle itself and you will have to deal with all of your own costs if anything goes wrong. This is generally the cheapest type of policy, as it comes with the fewest benefits. You may, however, want to consider higher levels of protection to protect you and your car more fully.
What if You Want to Add Vehicle Protection to Your Insurance?
The next step is a policy that covers third party, fire and theft. In addition to protecting other people and their property, this will also give you some basic vehicle protection. So, for example, if your car is stolen or set on fire, then your insurer should pay out, subject to its conditions. This still doesn't protect you, however, against other incidents such as accidents.
Do You Need a Fully Comprehensive Car Policy?
Comprehensive cover gives you all of the core third-party fire and theft benefits, but also adds features that could be useful. At a base level, this could, for example, cover damage to your vehicle, your possessions and you in the event of an accident. You can often extend a policy by adding on other benefits such as breakdown assistance/roadside recovery, courtesy car services and legal expenses.
How Much Car Insurance Do You Need?
Some drivers are happy with basic third party cover; others prefer to protect against accidents with a fully comprehensive policy. Your decision rests on how much protection you want, the type of car you drive and, often, on the costs of premium payments. Your age and driving habits may also play a part in the decision making and cost comparison process. Infrequent drivers, for example, may find it cheaper to buy Pay As You Drive insurance; those with good driving records may qualify for Pay How You Drive insurance. All drivers could benefit from looking at ways of reducing car policy costs before coming to a decision.
Sources:
- Directgov: Motor Insurance
- Monetos: Car Insurance, the Law
Sources accessed June 21, 2011.
Carol Finch - Carol Finch is the Topic Editor for Retirement Planning, Budgeting, E-Commerce & Technical/Business Writing on Suite101.
