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Motor insurance

What's it for?

The law says you have to have motor insurance to drive a car or motorbike. Some policies cover the replacement or repair of your vehicle, depending on the circumstances of an accident. You can choose from three levels of cover:

  • Third party – this is the minimum legal requirement and covers you if you injure a third party, including passengers or their property, but does not cover damage to your own vehicle.
  • Third party, fire and theft – covers third party injuries and liabilities, and also fire and theft to your own vehicle, but not accidental damage to your vehicle.
  • Comprehensive – as well as the above, this will cover fire, theft and accidental damage to your vehicle.

What does it cost?

You pay a premium depending on factors including the make of car, engine size, your age and your sex.

You'll also tend to get lower premiums if you park your car in a garage overnight for example, or if you have a clean driving licence.

Keeping costs down

Shop around – there are lots of insurers out there. Use the key policy information to see what is and isn't covered by the policy. Always compare what's covered by a policy, not just the price – these documents will help you do this. Some might be cheaper than others, but they may not offer the same level of protection.

Most policies have a standard excess charge which means you agree to pay the first part of any claim, for example the first £50 or £100. If you agree to pay a higher excess you might get a cheaper policy.

Depending on your claims history, the insurance company may offer you a no-claims discount. Generally this ranges from 30% to 65% and your premium will reduce accordingly.

Some companies allow you to pay a sum to protect or guarantee this no-claims discount, which can mean a saving on your future premiums should you have to make a claim. Bear in mind you are paying to keep the no claims discount and not to keep your premiums at a certain level – they may still rise, for example, as a result of general increases or as a result of your claim.

Top tips

  1. Read the paperwork and ask questions if you don't understand anything.
  2. Make sure you check what you're covered or not covered for.
  3. Shop around when it comes to renewal time to make sure you're getting the best deal.