Want to Live in Europe? Know the Car Insurance Coverage Options in the UK

by Staff Writer

I’m considering a move to the U.K. for a few months. I’ll likely buy a cheap car when I get there. If so, I’ll need to understand the car insurance coverage rules across the pond. Car insurance, even classic car insurance, is primarily aimed at providing financial protection against physical damage to a vehicle or persons that may result from traffic accidents and collisions.

It goes without saying that such insurance is a buffer against economic liabilities that could also result from such incidents. There are many car insurance categories available for drivers. While it is easy to determine what level of cover is required or mandatory by law, drivers also need to determine what they themselves need or want to protect and what level of coverage they would be most comfortable with, not simply how to save money on car insurance.

Know Your U.K. Car Insurance Requirements

The government implemented a law in 1930 making it mandatory for every person behind the wheel of a vehicle on a public road to possess at least third party personal injury insurance, one of the several car insurance categories available. The Road Traffic Act of 1988, which was modified in 1991, requires all drivers to be either insured or to make a specified security deposit with the Supreme Court’s Accountant General.

This is to ensure their liability for injuries caused to others, passengers included and for damage to property belonging to a third party arising from the use of a vehicle in public places. It is considered an offence to drive a vehicle, or allow other people to use a car on public roads without the protection benefit of insurance coverage.

The mandatory third party only insurance differs from the road traffic act only insurance coverage and the latter is not sold to drivers frequently. The reason it is not sold often to drivers is that the road traffic act only insurance provides only the bare minimum insurance protection cover to meet the requirements specified by the Road Traffic Act of 1988.

By way of example, the road traffic act only insurance has a limit of around $2 million for damage caused to the property of a third part. There is normally a greater monetary limit that comes with third party only insurance in the event of damage to property owned by a third party.

Cheap Car Insurance Options

The best minimum level of insurance protection available, which satisfies all requirements specified by the Act is therefore the third party only insurance. The coverage provided by this category of insurance is basic but exceeds the specified requirements of the Act, covering any third party liabilities. However, it does not cover any other forms of risk.

As such, many drivers are more likely to purchase insurance cover for third party, theft and fire. Amongst all the car insurance categories, this form of protection covers all liabilities for damage caused to third parties, as well as covers the vehicle owner against destruction, damage or loss of the vehicle that may be caused by a fire (either caused by vehicular fault or by a malicious third party) or theft of the car.

This category of car insurance coverage, like the two mentioned before it, do not protect against damage to the car caused by other risks. These car insurance categories also do not protect against damage caused by the driver himself or herself.

For more complete coverage, drivers can opt for the comprehensive insurance protection scheme, which covers all of the risks outlined above, as well as protecting against vehicular damage by the driver himself or herself. Although this type of insurance is the most expensive form of cover, comprehensive insurance protection also ensures against other hazards, such as vandalism, damage caused by flood, or animals, amongst other risks.

This form of coverage is most recommended for persons operating cars which are leased or financed, or for owners of vehicles which are new or in excellent condition.

Other U.K. car insurance categories include coverage against uninsured or under-insured drivers. Such schemes protect an insured driver and insured passengers for bodily injuries, damage or death caused by a negligent, at-fault uninsured or under-insured driver or a hit-and-run-driver. Drivers who do not possess health insurance could benefit from such protection, since if the insurance limits are inadequate, affected parties without such insurance may be liable to paying additional amounts out of their own pockets.

Insurance cover may also be purchased against uninsured or under-insured property damage. Such schemes covers the policy holder’s vehicle when damage is sustained by him or her and the other at-fault party does not have any insurance or adequate insurance. However, it must be noted that such damage coverage does not replace collision coverage.

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