car insurance

everything you need to know before you buy - what the cover levels mean, what drives the price, and how to avoid the common traps.

do i legally need it?

yes. in the UK it's a legal requirement to have at least third-party car insurance to drive on public roads. under continuous insurance enforcement, a car that's registered to you must be insured at all times unless you've declared it off the road with a SORN - even if it's parked up and never driven.

the three levels of cover

• third party only - the legal minimum. covers damage you cause to other people, their vehicles and property. it doesn't cover your own car at all.
• third party, fire and theft - the above, plus your own car if it's stolen or damaged by fire.
• comprehensive - the widest cover. adds damage to your own car (including accidents that are your fault), and usually extras like windscreen cover and personal-accident cover.

counter-intuitively, comprehensive isn't always the most expensive. insurers have historically seen higher-risk drivers choose the minimum cover, so third-party-only can end up pricier. always compare all three.

what decides your price

• you - age, driving history, claims history, occupation, how long you've held your licence, and any points or convictions.
• your car - its insurance group (1-50), value, engine size, security, and whether it's been modified.
• where and how you drive - your postcode, annual mileage, where the car's parked overnight, and what you use it for (social, commuting, business).
• your excess - the amount you pay towards any claim. a higher voluntary excess lowers the premium, but make sure you could actually afford it.
• your no-claims discount - every year you go without claiming builds a discount, often substantial after a few years. you can usually pay a little extra to protect it.

jargon worth knowing

• compulsory vs voluntary excess - compulsory is set by the insurer and can't be changed; voluntary is your choice on top.
• named driver - someone else insured to drive your car under your policy. adding an experienced named driver can sometimes lower the price; naming them as the main driver when they aren't ("fronting") is fraud.
• telematics / black box - a policy that prices you on how you actually drive, tracked by a device or app. often cheaper for young or new drivers.
• courtesy car, legal cover, breakdown - common add-ons. handy, but check whether you already have them elsewhere before paying twice.

how to keep the cost down

• shop around at every renewal - loyalty is rarely rewarded.
• be accurate, not optimistic, about mileage and use - understating it can invalidate a claim.
• pay annually if you can - monthly instalments usually add interest.
• keep the car secure - an approved alarm, immobiliser or off-street parking can help.
• consider a higher voluntary excess, within what you could pay tomorrow.
• don't auto-renew without checking - insurers must now offer existing customers the same price as new ones for the same cover, but that doesn't mean it's the best price on the market.

this guide is general information to help you understand the product. it isn't financial advice, and it doesn't take your circumstances into account.