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Guide Contents

What is motor insurance cover?
Why should I consider a more comprehensive motor insurance policy?
What are the different policy types of UK motor insurance?
Motorcycle insurance
What you can do to get the cheapest motor insurance premiums
Low cost motor insurance premiums by shopping around
Applying for a motor insurance policy
Motor Insurance Information - FAQ
Where can I go to get more motor insurance advice

What is motor insurance cover?

Motor insurance cover (also known as auto insurance, car insurance or vehicle insurance) is a type of insurance for cars, motorcycles (including mopeds and sidecars), vans and other motor vehicles. Motor insurance provides protection against:

• losses incurred as a result of a traffic accident
• liability that could arise from an accident involving your vehicle
• theft and/or damage caused by fire (depending on policy type)

Today the Road Traffic Act (1988 & 1991) requires that every vehicle registered in the UK must be taxed if used or kept on a public road. In order to tax your vehicle, you must have insurance that covers you against:

• third party claims for death or injury
• damage to property caused by the vehicle

The Road Traffic Act also makes a distinction between vehicle 'users' and 'drivers', motor insurance indemnifies (provides cover to) the 'user' rather than the 'driver', so the insured user of a vehicle doesn't have to be its driver!

However, even if you are not the driver of the vehicle, you must have a financial interest in the vehicle you are insuring, for example you can't take out insurance on your boss's vehicle then claim if they crash! You have to have an insurable interest, i.e. show that you would suffer financially if your motor vehicle was stolen or damaged, for example if you owned the vehicle or were paying a loan on it.

How does motor insurance work...

In insurance terms, there are several parties (people) involved when a motor insurance claim is made, these are known as:

• First party - vehicle user (person insured)
• Second party - company providing the insurance cover (the insurer)
• Third party - person or people who suffer a loss or injury as a result of your vehicle

Motor insurance is designed to put you back in the same position financially that you were in before an insured loss occurred. In addition to the minimum insurance cover required by law, this booklet looks at the other types of motor insurance available to private (non-commercial) vehicle users, to enable you to make an informed decision about what cover is right for you.

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