Insurance

The registered keeper of a vehicle MUST make sure the vehicle has motor insurance unless it’s kept off the road and a Statutory Off-Road Notification (SORN) has been made (see later in this section). As part of Continuous Insurance Enforcement (CIE), the registered keeper will be notified when their vehicle appears to be uninsured. If they don’t act on the letter and insure the vehicle, they’ll risk

• a fixed-penalty fine of £100
• a court prosecution and a fine of up to £1000
• having the vehicle clamped, seized and destroyed.

It’s the driver’s responsibility to make sure that they’re insured to drive the vehicle they’re using. Uninsured drivers can now be detected by the police and roadside automatic number-plate recognition (ANPR) cameras, which are linked to the motor insurance database. The penalties for uninsured drivers include

• an unlimited fine
• 6–8 penalty points on their licence
• having the vehicle seized by the police, taken away and destroyed.

Motor insurance can be arranged online or in person with an insurance company, broker or other insurance provider.

Types of insurance

Third-party

This is the legal minimum and generally the cheapest insurance cover. ‘Third party’ means anyone you might injure or whose property you might damage. You’re not covered for damage to the vehicle you’re driving or injury to yourself.

Third-party, fire and theft

This is the same as third-party, except that it also covers you against your vehicle being stolen or damaged by fire.

Comprehensive

This is the best type of insurance, but the most expensive. Apart from covering other persons and property for injury and damage, it also covers damage to your vehicle. Additional benefits, such as cover for the contents of the vehicle, may be offered.

The cost of insurance

This depends on a number of factors, including

• your age; the younger you are, the more it will cost, especially if you’re under 25
• whether you’ve completed the Pass Plus scheme
• how long you’ve been driving
• the make and power of your vehicle
• where you live and keep your car overnight
• how you intend to use your vehicle
• when and how you drive (with telematics insurance)
• any court convictions and fixed-penalty offences
• any no-claims discount you’ve earned.

It can also vary from one insurer to another, so it pays to shop around.

You must answer all questions on the insurance application honestly as, in the event of a claim, your policy could be worthless if the insurance company discovers that you haven’t told the truth. They then have the right to void the policy, which would leave you open to prosecution for being uninsured. For example, a young person is committing fraud if they state that an older, more experienced driver is the main user of their vehicle to reduce the cost of their cover. This is known as ‘fronting’ and insurance companies look out for it.

Telematics insurance

These policies (also known as black box insurance) offer a personalised price for car insurance based on when and how you drive. A ‘black box’ is fitted into your car and uses GPS technology to measure your driving performance.

Your insurer uses this information to calculate your premiums. The idea is that by driving safely you can save money but poor driving could result in your premiums increasing.

What’s insured

This also varies from company to company. Read your insurance policy carefully and ask your insurer or broker if you’re in any doubt. Otherwise you might have difficulties when you claim.

If you do make a claim, you’ll often have to pay part of the cost yourself – this is called the ‘excess’, and it’s usually higher for young and inexperienced drivers.

Insurance documents

Certificate of insurance

This short and simple document shows

• who’s insured to drive the vehicle
• the vehicle covered
• the period of cover
• what type of use the vehicle is insured for
• whether there’s cover to drive other vehicles.

Sometimes a broker will give you a temporary certificate or ‘cover note’ while you’re waiting for the certificate.

A cover note normally lasts for one month.

Showing your certificate

Keep the certificate safe and produce it

• if the police ask you to
• if you’re involved in an incident.

The policy document

This contains the full details of the contract between you and the insurance company and how to claim. Insurance companies also supply a summary of cover showing the main cover, terms and conditions. If there’s anything you don’t understand, ask your broker or the insurance company to explain.