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Car Insurance in the UK: A Simple Guide

First time buying UK car insurance?

You might be thinking what is car insurance? And how does car insurance work in the UK? Here’s what you need to know. 

You have to get car insurance in the UK

If you want to drive in the UK, you have to be covered by an insurer. It’s a legal requirement. The minimum amount of coverage you need to have is Third-party Only insurance. 

The individual is covered, not the car itself

If anyone else needs to drive your car, you must add them as an additional driver on your policy. And if you want to drive someone else's car, you need to make sure you're covered either by your insurance or the car owner’s insurance. Not all policies include this.  

9 out of 10 people choose Fully Comprehensive cover 

Fully Comprehensive means that you’re insured for any damages caused to someone else’s vehicle as well as your own. It covers damages caused by fire or theft to you, your car or your property. It also protects the other driver, their car and their property - as well as compensation for injuries they get as a result of an accident.

Fully comprehensive provides you with the highest level of protection out of all the different types of car insurance. 

Third-party Only is the minimum amount of cover you can legally get 

Third-party Only car insurance provides the least amount of protection to drivers. These policies only cover injuries and damages to the other person involved in an accident. Not you.

People often choose Third-party Only insurance to get a cheaper price. But these policies are getting more expensive than they used to be. That’s because insurers set their policy prices based on risk, and recent data shows that Third-party Only insurance is often taken out by riskier or more inexperienced drivers.

Most of the drivers making claims also come from Third-party Only policies, which costs the insurers and has a knock-on effect on Third-party Only policy prices.

You can read more about the different levels of cover here

You get discounts for claim-free driving

Similarly to many countries, UK drivers are rewarded by car insurers for their years of claim-free driving. This is called a No Claims Discount. The longer you’ve been driving in the UK without making a claim, the bigger your No Claims Discount. 

At Marshmallow, we also look at your claim-free driving experience in any country, helping UK newcomers save up to 45% on car insurance. Find out more here

If you make a claim, you’ll pay the excess and the insurer will pay the rest

An excess is the amount of money you'll need to pay if you make a claim. You agree to this sum before you sign up for your policy. No matter how expensive the damage is, your insurer will pay all the other costs on top for any repairs, replacements and other damage. 

When you sign up with an insurer, you’ll agree on a Compulsory Excess amount. You might also choose to top up with a Voluntary Excess to make your overall policy price cheaper

If you make a claim, you’ll pay the Compulsory and Voluntary Excess. Your insurer will cover the rest. 

When making a claim, the more detail you give = the stronger the claim

If you’re involved in an accident, you’ll need to gather as much information as you can to share with your insurer. Once you’ve made sure that you’re safe from any harm, make a note of the weather, where the accident took place and what happened. If you can, take some photos of the accident too.

You’ll also need to get the details of anyone else involved. That includes their phone number, car registration and the name of their insurer.

Once you’ve got all this info, contact your insurer as soon as you can. They’ll handle the claim from there.

If you make a claim, your policy price is likely to go up next year

And this is still likely to be true, even if you switch insurers. That’s because all insurers look at your claims history when setting your policy price.

Lots of other factors affect the price too, including where you live and how much you drive. These things apply wherever you get cover from.

So now you’ve got the basics of car insurance covered. Why not improve your knowledge of driving in the UK? This blog will help.

Or, find out how much we could save you on your cover by looking at ALL your driving experience, in the UK and abroad. Get a quote here.