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Legal guide to UK motoring, sections for law enforcement, Driver licensing, learner and new drivers, buying and selling, speeding fines, owning a vehicle, wheel clamping, traffic information.

Vehicle Insurance


Insurance Information

Types of CoverCertificatesPremiums ExplainedInsurance Groups Explained
Insurance Information

Types of Cover

Policy Cover Two thirds of private motorists have comprehensive insurance. Most of the remainder choose third party fire and theft, with a small proportion taking out more limited forms of cover.

Third Party This covers:

1: Liability for injuries to other people, including passengers.

2: Liability for damage to other people's property.
3: Liability of passengers for accidents caused by them.

4: Liability arising from the use of a caravan or trailer, while attached to the car. Third Party Fire and Theft As previous plus:

5: Fire or Theft - If your car is not normally kept in a garage at night, theft cover may be excluded or subject to special conditions. There may be an "excess" - a part of the cost of the claim for which you are responsible - following an incident of theft. If you are selling your car make sure you receive proper payment before parting with it. Your insurance policy will not cover your loss if your car is taken from you by deception. Comprehensive As above and previous plus:

6: Accidental damage to your own car. There may be an "excess" - part of the cost of the claim for which you are responsible.

7: A personal accident benefit. Certain amounts are paid in the event of the death or specific permanent disablement of the policyholder - and sometimes his or her spouse or family member.

8: Medical expenses necessarily incurred, up to a stated limit.

9: Loss of or damage to personal effects in the car, up to a stated limit. Source: Association of British Insurers.


Read Your Policy Motor insurers usually issue three documents: The Certificate of Insurance - this is evidence of insurance as required by the Road Traffic Act. A Cover Note - acts as a temporary policy and also as a temporary certificate of insurance for the purposes of the Road Traffic Act. The Policy Document - sets out in full the terms and conditions of your policy. You should read your policy carefully - there is no small print or difficult language in modern insurance policy booklets.

Premiums Explained

How Premiums are Calculated Factors taken into account in costing your insurance include who will drive, the type of car, where it is kept, the uses to which it is put, and the type of cover required. When buying motor insurance you must give the insurer full information. Drivers The policy may only cover driving by yourself or specified people, or it may allow driving by any qualified person with your permission, possibly over a certain age limit. Your insurers will want to know about anyone who is likely to drive - particularly their age, experience, driving record and occupation. Your Car Family cars with moderate repair costs are cheaper to insure than large or powerful cars which can be expensive to repair. Each model is given an insurance group rating. This system is described later in this Information Sheet. Older cars often attract discounts from comprehensive insurance premiums. District Insurance claims are more frequent in urban areas so motorists in cities usually pay more for their insurance than those who live in the country. The place where the car is kept is a rating factor, so tell your insurers if the car is not kept at your home address. Use Your policy and certificate set out the uses for which your car is insured. For example, if you or any authorised driver want to use your car in connection with work, make sure that your policy covers this. No Claims Discount Policyholders with a claim free (not blame free) record normally qualify for a premium discount. Scales do vary but usually range from 30% for one claim free year up to 60% or more after four or five years. "Protected Discount" policies are often available for motorists with maximum discount. For an extra premium, a number of claims are allowed without affecting the discount. Typically two claims are allowed in a three to five year period.

Insurance Groups Explained

The Group Rating System

Insurance companies put car models into twenty groups. This means that each model of car can be accurately banded with cars of similar characteristics. There can be a significant spread of groups within a particular model range.

How the System Works

Nearly three quarters of all money paid out in motor insurance claims goes on repairing cars. The cost of spare parts and the times taken by repairers are therefore major factors in pricing motor insurance. The factors used to calculate group ratings are:

Damage and Parts Costs

The likely extent of damage to each car model and the cost of the parts involved in its repair. The lower these costs, the more likelihood there is of a lower group rating.

Repair Times

Longer repair times mean higher costs and the greater likelihood of a higher group rating. Different paint finishes on modern cars are an important factor. These, too, are taken into account.

New Car Values

The prices of new cars identify the higher specification models within a model range.

Body Shells

The availability of body shells (the basic frame of the car) is taken into account in group ratings because they are essential for certain accidental damage repairs.


Acceleration and top speed are important factors. Insurance companies know very well, from their claims statistics, that high performance cars often result in more frequent insurance claims.

Car Security

Security features fitted as standard equipment by motor manufacturers can help to reduce insurance claims costs. Such features include high security door locks, alarm/immobilisation systems, glass etching, coded audio equipment, locking devices for alloy wheels and visible VIN numbers.

Recommended Group Ratings

The group ratings determined by the Association of British Insurers are recommendations only. Individual insurance companies, depending on their own experience, may vary from these recommendations.

Buying a Car

Motorists planning to buy a new car should check, in motoring magazines, the insurance group rating of the exact model they have in mind. The higher the group number the more will be the premium. Source: Association of British Insurers

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