Car insurance

You need car insurance as it can provide you with cover if you’re involved in a car accident. It’s also a legal requirement if you own or drive a car, unless you declare the vehicle off-road (SORN) and keep it on private property.

If you’re caught without car insurance, you could be fined a minimum of £300 and given six penalty points. If you end up in court, you might be given an unlimited fine and disqualified from driving.

If you’re new to driving, you’ll find your insurance is more expensive than for people with more driving experience. The reason for this is that new drivers are considered more of a risk by insurance providers. This is partly because of inexperience, but mainly because most new drivers are young drivers – and a quarter of young drivers will be involved in an accident in the first two years of being on the road.

There are ways you can reduce the cost of your insurance – telematics policies can be cheaper, for example.

If your car is involved in an accident, car insurance could provide cover for:

• injuries to you or other people
• damage to your car
• damage to another vehicle
• property damage
• car insurance could also cover you if your car is damaged by fire, attempted theft or if it’s stolen.

Not all car insurance policies offer the same cover, so always read the small print and make sure you’re happy with any exclusions or limitations.

Whether it’s better to pay for your premium annually or each month will depend on your circumstances.

Paying an annual lump sum is usually cheaper than paying monthly. A monthly payment plan could mean you pay more as you might be charged interest on the instalments.

The insurance provider will carry out a credit check if you want to pay for your car insurance monthly. Providers will also look at your credit score (a 'soft search') when you compare insurance quotes, but this is just to check your details and won’t affect your score.

See more on car insurance and credit checks

When you compare car insurance with us and enter your registration number, where possible we’ll give you a valuation figure based on the car’s market value at the time – the amount you’d receive if your car was written off. Alternatively, you can use a free online tool to find out your car’s current value or look at used-car listings to see the prices of similar models of a similar age, condition and mileage.

See more on how car values affect premiums

Factors that impact car insurance include:

• The insurance group your car is in.
• Your annual mileage. The more you drive, the more chance there is of you having an accident.
• Your occupation. Some jobs are considered riskier than others.
• Where you live. Most claims are for accidents close to home, so your address is a key factor that impacts your car insurance.
• Your age. Young drivers will generally pay more than older drivers.
• Your driving experience. The length of time you've been driving for will impact your premium, especially if you're also a young driver.
• Any criminal convictions. You'll be considered a higher risk so are likely to pay more.
• Your claims history. Including any no claims discount.
• Adding a named driver to your policy. This could decrease your premium if the person is an experienced driver with no claims.

It depends on the insurance provider. When you compare with us, you can save your searches, but you won’t necessarily get the price that you saved when you come back to buy your policy. Some insurance quotes last as long as 60 days, but some can change at any point.

If you cancel within the 14-day cooling-off period, you might have to pay an admin fee but you’ll get a refund minus the days the policy was active for. If you cancel later on, you may have to pay cancellation fees and admin fees. You may or may not get a refund, depending on the circumstances and whether you pay for your policy annually or monthly.

Find out everything you need to know about cancelling car insurance

You don’t have to make a claim if you have an accident, or for something else covered by your policy, but you must always let your insurance provider know if you’ve had an accident - whether you claim or not. If you don’t tell them, you could invalidate your policy.

If you decide to make a claim:

1. Check your policyholder documents for details of how to claim and any time limits on claims.
2. Contact your insurance provider directly. They may have a dedicated claims line. You’ll probably be asked to complete a claims form.
3. Get a crime reference number from the police if your car has been stolen or vandalised. Your policy may need you to do this within a set timeframe. You’ll need to give this to your insurance provider.
4. Gather the information you need to give your insurance provider.

• If you’ve been involved in an accident, this includes the details of the other driver(s) and any witnesses, including the driver’s insurance details and registration number. You’ll need to get all these details at the scene.
• If your car has been vandalised, photos may be useful.

Find out more about the claim process

There’s a few reasons why an insurance provider might not pay out. It might be that:

• the policyholder isn’t covered for what they’re trying to claim for
• there’s a dispute about who’s at fault in an accident
• the provider might believe you’ve invalidated your car insurance – perhaps by giving inaccurate information or not telling them about something they should know.

If your claim is turned down and you don’t think it’s justified,  you can take action. Find out what to do if your car insurance provider won’t pay out.

It’s almost certain that it will – in fact, your premium may go up even if you have an accident and don’t make a claim, because the insurance provider might consider there’s more of a risk of you being in another accident. If you’ve protected your no claims discount that shouldn’t be affected, but your basic premium is still likely to go up.

See more on how an accident can affect your car insurance premium.

Telematics or ‘black box’ insurance uses technology to monitor the way you drive and transmits the data to your insurance provider. If you drive safely, it could lead to cheaper car insurance. Telematics works either through a GPS device – the black box – fitted in your car or a smartphone app. These record things like how you corner, brake, your speed and the time of day and how far you drive.

Black box insurance can be particularly useful for young and inexperienced drivers. It can give insurance providers evidence that you’re a safe driver and could reduce your premiums.

Find out about telematics insurance.

If you share your car with one of your parents, having them on your policy as a ‘named’ or additional driver could reduce your premium. But they mustn’t be on the policy as the main driver if they’re not. This is a type of fraud called fronting and is illegal.

A no claims bonus – also called a no claims discount or NCD – builds up every year you have car insurance without making a claim. You can accrue up to five years and sometimes more, depending on the insurance provider. Your NCD can cut the cost of your car insurance when you renew. You can also opt to protect it so that it’s not affected if you do make a claim.