Car insurance is a legal requirement if you drive in the UK. Even if you’re a learner on a provisional licence, you need valid insurance before getting behind the wheel. With dozens of insurers offering cover, shopping around is essential to find the right policy at the right price.
Types of Car Insurance
There are three main levels of cover:
- Third Party Only
This is the minimum legal requirement. If you cause an accident, it covers damage to the other person’s car or property and their injuries. It doesn’t cover any damage to your own vehicle. - Third Party, Fire and Theft
Offers the same cover as third party only but adds protection if your car is stolen or damaged by fire. - Comprehensive
Covers damage to your own car as well as others, regardless of who caused the accident. Most comprehensive policies also include features like windscreen cover, personal injury cover, and sometimes extras like legal expenses or a courtesy car.
Buying Car Insurance
To get the best deal:
- Use multiple comparison websites to check prices
- Contact insurers directly — some don’t appear on comparison sites
- Double-check the details and assumptions in your quote (e.g. mileage, job title, overnight parking)
- Review optional extras and remove anything you don’t need
You can pay for insurance monthly or annually. Paying in full usually works out cheaper, as monthly instalments often include interest or admin fees.
Why Insurance Prices Vary
Insurers calculate premiums based on risk. Factors like age, driving history, vehicle type, postcode, and even occupation can affect how much you pay. For example:
- A 19-year-old with a new licence and a sports car will be seen as a higher risk
- A 40-year-old with a clean record driving a small hatchback will likely pay much less
Driving experience, past claims, and where you park your car overnight also impact your premium.
Understanding Excess
An excess is the amount you agree to pay towards a claim. There are two types:
- Compulsory excess: Set by your insurer
- Voluntary excess: Chosen by you to lower your premium
For example, if you have a total excess of £150 and make a claim for £3,000, you’ll pay the first £150, and your insurer covers the rest.
Choosing a higher voluntary excess can reduce your premium, but make sure it’s affordable if you ever need to claim.
Your Policy Documents
Once you buy a policy, you’ll receive:
- A policy booklet with full terms and conditions
- A certificate of insurance that confirms your cover
It’s a good idea to keep a digital or printed copy in your car in case you’re involved in an accident. Most insurers also let you access documents via an app or online account.
No Claims Discount (NCD)
Each year you drive without making a claim can earn you a no claims discount. This can significantly reduce your premium over time. For example, five years of claim-free driving might result in a 50% discount or more.
You can transfer your NCD between insurers, so keep proof when switching providers. Some insurers offer optional NCD protection so you won’t lose it after a single claim.
Penalty Points and Insurance
If you receive points on your licence for speeding, driving offences, or other infractions, you must tell your insurer. Penalty points can increase your premium, especially for serious offences.
You can be disqualified from driving if you accumulate 12 or more points within 3 years (or just 6 points if you’re a newly qualified driver within your first 2 years).
Always declare penalty points when applying for insurance or if you receive them mid-policy — failing to do so can invalidate your insurance.
Understanding the basics of car insurance helps you make better decisions, avoid surprises, and potentially save money. Take time to compare policies, check the fine print, and always keep your insurer updated about changes to your circumstances.