This snapshot, taken on 07/08/2008, shows web content selected for preservation by The National Archives. External links, forms and search boxes may not work in archived websites.

Motor Insurance - Frequently Asked Questions

Print Print page   Download PDF PDF image

Q1. When should I have motor insurance?

You must be insured if you use a vehicle on a road or other public place.

Q2. Why do I need motor insurance?

Motor insurance is required to ensure that anyone who is injured or suffers damage to property can seek financial compensation.

Q3. Where does the requirement exist in law?

The requirement for third party motor insurance is specified in the Road Traffic Act 1988.

Q4. How much does it cost?

The cost of motor insurance can vary greatly depending on the type of vehicle, where it is mainly being used, the age and driving history of the driver, the type of cover required and the use that the vehicle will be put to.

Q5. What affects the cost of insurance?

Insurance companies price their products according to the risk that an application poses. In assessing this risk, insurance companies will consider a range of factors including your age, driving record, previous insurance claims, the type of car being used, where you live, and so on.

Q6. What is a no-claim discount?

This is a reduction in your premium in return for you not making a claim, also referred to as a no-claim bonus. Over a period of years in which the discount is earned (usually four or five), it can lead to as much as a 75% reduction in the cost of your insurance and will stay with you if you change insurers. You may lose all or part of your discount if you make a claim and your insurer is unable to recover its outlay from someone else.

Many insurers will allow you to protect your no-claim discount for an additional fee or for a slight reduction in the discount scale. This means that even if you make, say, two claims in a three-year period you will be able to keep your no-claim discount. Again, this practice varies from company to company. Note that it is the discount that is protected - your premium may still increase depending on your claims history.

Q7. What is a policy excess?

This is an amount agreed between yourself and the insurer that you will pay if there is a claim. Generally this varies between £100 and £250 and can often be negotiated - the more you are prepared to pay, the lower your overall insurance premium will be. A compulsory excess will invariably apply while the car is being used by an inexperienced driver.

Q8. What happens if I am involved in an accident?

If you are involved in an accident which causes damage or injury to any other person, vehicle, animal or property, you must give both your own and the vehicle owner's name and address, along with the registration number of the vehicle, to anyone having reasonable grounds for requiring them. If you do not give your details then you should report the accident to the police as soon as possible within 24 hours. You must also report the accident to your insurer, even if you are not intending to make a claim.

Q9. What happens if I am involved in an accident with an uninsured motorist?

Any accident with an uninsured driver should be reported to the police. You should also report any accident to your insurer who will advise you further as regards any claim. Additionally, the Motor Insurers' Bureau (MIB) was established in 1946 to ensure that compensation is available to the innocent victims of uninsured drivers or hit and run (untraced) drivers. Further information can be found on the MIB website (www.mib.org.uk).