Car Insurance A Driver's Guide

Car Insurance A Driver's Guide

Car Insurance A Driver's Guide

This guide has been prepared by Black Country Driving School, and is intended to provide general information to help drivers to understand car insurance and to stay legal; whilst every effort has been made to ensure that the information is accurate and up to date, it is not intended to be a legal guide.

Legal Requirement For Car Insurance

Every vehicle that is on a public road must have a valid car insurance policy, this applies even when a vehicle is parked.

If you own a vehicle the only way to be legal and not have a car insurance policy is for the vehicle to be parked on private land, which could include your driveway, and to have completed a SORN, A Statutory Off Road Notification.

What Is Insured?

The obvious answer to “What is insured?” is “The Car”.

However, there are other important considerations.

The insurance policy is linked to the car, but there are 3 things that must be insured:

• The Car
• The Driver using the car
• The Use, or Purpose that the car is being used for

The Driver Using The Car

The Driver must be insured to drive the car.

An insurance policy may have various options as to who is allowed to drive, these could include:

• The policy holder is the only one that can drive
• The policy holder and their partner are the only ones that can drive
• The policy holder and named drivers
• The policy holder and anyone over the age of 25 with the policy holder’s permission
• The policy holder and anyone with the policy holder’s permission

There can be other permutations of who is allowed to drive, but if someone drives the vehicle without insurance cover then both the driver and the policy holder are committing an offence.

The Use, Or Purpose That The Car Is Being Used For

There are different uses that a car can be put to that insurance companies view as providing different levels of risk, and therefore will affect the insurance premium charged.

Some examples can be:

Social, Domestic and Pleasure

This use would include:

• Visiting family or friends
• Going shopping
• Going to places for leisure purposes

• It does not cover driving to or from work

Social, Domestic, Pleasure and Commuting

This would include:

• Social, Domestic and Pleasure use as listed above
• The addition of driving to and from work

• It will not include using the vehicle for work in any way

Business Use

Business use may be needed if you are required to:

• Drive colleagues or clients in relation to your work
• Drive to meet clients, customers or suppliers
• Drive to different locations in relation to your work
• Carry anything in your car in relation to work
  • e.g. taking a sample to a potential client or customer
  • or moving something from one branch of your company to another

There are many different classes of business use, depending on the nature of the business and the type of journeys made.

Being insured for one type of business use, does not mean that another type of business use is insured

Using a car for anything business related with only a social, domestic, pleasure and commuting policy could mean that your insurance is invalid.

Level Of Insurance Cover

There are generally 3 types of car insurance policy available:

• Third Party
• Third Party, Fire and Theft
• Comprehensive

Third Party Insurance

Third party insurance is the minimum insurance policy required by the law.

In the contract that you have with the insurance company:

• The “First Party” is the insurance company
• The “Second Party” is you, the policy holder
• The “Third Party” is any one else

Third party insurance for your vehicle is therefore to provide insurance cover for any damage that you cause to any one else’s property, or any injury that you cause to any one else.

Third Party insurance does not cover any losses that the policy holder incurs, it does not cover any repairs or replacement of your vehicle.

If you are injured or your vehicle is damaged and another road user is at fault, you may be able to claim against their insurance policy.

Third Party Fire And Theft Insurance

Third party, fire and theft insurance for your vehicle provides the same cover as Third party insurance, with the addition of insurance to cover the theft of your vehicle, damage caused by attempted theft, and cover against fire damage to your vehicle.

This insurance does not cover any losses that the policy holder incurs, or any repairs or replacement of your vehicle unless they are caused by fire, theft or attempted theft.

If you are injured or your vehicle is damaged and another road user is at fault, you may be able to claim against their insurance policy.

Comprehensive Insurance

Comprehensive insurance for your vehicle, despite the name does not mean that everything is insured against any risk.

Comprehensive insurance for your vehicle provides the same level of cover as third party, fire and theft insurance, with the addition of covering damage to your own vehicle, even if you are deemed to be at fault.

As Comprehensive insurance provides a higher level of cover, you would expect it to be the most expensive, but because higher risk drivers often choose third party insurance policies, sometimes a comprehensive policy can be cheaper.

Driving Other Cars

If you are driving a car belonging to someone else, it is your responsibility to ensure that you are insured to drive it, and that the purpose that you are using the car for is also covered.

Comprehensive insurance does not automatically mean that you are insured.

It is possible that your own insurance policy might include insurance cover for you to drive other vehicles, if this cover is provided it will only provide third party cover, and it will only cover vehicles that have a valid insurance policy of their own.

Penalties For Driving Without Insurance

Penalties will be applied both to people deliberately choosing to commit the offence, and also to anyone that unintentionally drives without valid insurance.

Examples could include:

• Forgetting to renew your insurance
• Using a vehicle to commute to work with only insurance for social use of the car
• Driving a friends car that is only insured for them to drive

The typical punishment is a £300 fixed penalty and 6 points on your driving licence.

6 points on the licence of a driver in the first 2 years of driving will result in them having to retake the theory and practical driving tests.

The maximum punishment is:

• An unlimited fine
• Disqualification from driving
• Vehicle seized by police – even if it doesn’t belong to you
• Vehicle destroyed by police – even if it doesn’t belong to you

This guide has been prepared by Black Country Driving School, and is intended to provide general information to help drivers to understand car insurance and to stay legal; whilst every effort has been made to ensure that the information is accurate and up to date, it is not intended to be a legal guide.

Pages in the Law and Documentation A Drivers Guide section of the Black Country Driving School website:

Sections of the Black Country Driving School website: