Car Insurance Explained

In the UK, it is a legal requirement for all cars being driven to have a car insurance policy. There are two types of policy available – third party fire and theft and comprehensive. Your car insurance certificate provides proof that you are legally covered to drive your car, so it should always be kept in a safe place.

If you choose a comprehensive or a third party fire and theft policy, you may be covered to drive another persons car (with their permission) on a third party only basis. However, not all car insurance companies offer a ‘Driving Other Cars’ option, so you should never assume that you are covered – always check your car insurance Certificate before you drive someone else’s car.

Driving without car insurance in the UK is a criminal offence and carries a maximum fine of £5,000 and six to eight penalty points on your driving licence. In some cases, it can even result in a driving ban.

How car insurance premiums are calculated

Insurance companies use a combination of factors to set the cost of your car insurance such as:

  • Your age
  • The number of years you’ve been driving
  • Your address
  • The make and model of car you drive

All these factors are used to ensure that everyone pays a fair price for their car insurance.