You are required by law to have car insurance if you use a car. This is to ensure that if you cause a collision and injure another person, or damage another person’s property, you will be able to meet the cost of any claim made against you. Where you injure another person, the cost could run to several million pounds.

Driving without insurance is a serious offence. If you are caught driving uninsured, the police may seize and destroy your vehicle and leave you on the roadside. If you are convicted, you could face between six and eight penalty points on your licence, a maximum fi ne of £5,000, and you could be disqualifi ed from driving.

If you cause a collision while driving uninsured, you may be legally liable for the cost of providing care and compensation to anyone injured or for any property you damage. Assets such as your car, house, investments and business could be taken and sold to pay for these costs. The cost of collisions involving uninsured drivers adds around £30 to the annual premium of every honest motorist.

Keeping a vehicle without insurance will be a criminal offence from 2009. If you are the registered keeper of a vehicle, you will be obliged to make sure that the vehicle is insured, unless you have notifi ed the Driver and Vehicle Licensing Agency (DVLA) that it is off the road. Repeated failure to insure will lead to your vehicle being clamped, and it may ultimately be seized and destroyed.

Car insurance can also protect you against the cost of accidental damage, theft, fire and flood damage to your own vehicle. The level of cover you have will depend on the type of policy you buy.

There are three main levels of car insurance cover:

• Third party – this provides the minimum level of cover required by law. It pays for compensation to anyone you might injure, or whose property you might damage.

• Third party, fi re and theft – in addition to the level of cover provided by third party insurance, this pays for loss of or damage to your car by fi re or theft.

• Comprehensive – this includes the same level of protection as third party, fire and theft, but also provides cover for your car against accidental damage. Comprehensive policies will often cover personal belongings left in your car and medical expenses, and may provide personal accident benefi ts.

Download Driving With Confidence: Making Sense of Car Insurance

PDF format, 456KB, Published by ABI.

After your home, your car is likely to be your most expensive purchase. Motor insurance is not only a legal requirement; it gives you peace of mind that, should the worst happen, you are not left with what could be fi nancially crippling costs.

Visit Association of British Insurers (ABI) Website

The ABI (Association of British Insurers) represents the collective interests of the UK’s insurance industry. The Association speaks out on issues of common interest; helps to inform and participate in debates on public policy issues; and also acts as an advocate for high standards of customer service in the insurance industry.

The Association has around 400 companies in membership. Between them, they provide 94% of domestic insurance services sold in the UK. ABI member companies account for almost 20 per cent of investments in the London stock market.

The ABI’s policy work is organised around four main policy departments: General Insurance; Life and Pensions; Financial Regulation and Taxation and Investment Affairs.In addition, the ABI has an expert Research and Statistics Department, and represents the insurance industry to external audiences through its Media and Political Affairs and European and International teams.

The ABI organises a large number of conferences, seminars and other events for the insurance industry. It also publishes research reports and policy documents.

The Association was formed in 1985 when a number of existing industry bodies joined together, notably the British Insurance Association, the Life Offices’ Association, the Fire Offices Committee and the Accident Offices Association.Previously, the UK insurance industry was represented only by these specialist associations. The creation of the ABI meant that all sectors of the insurance company market could now speak through a single organisation.

The ABI is funded by the subscriptions of member companies. The ABI’s Board, chaired by Archie Kane, Group Executive Director, Insurance and Investments, Lloyds TSB Group, governs the organisation. The work of the major policy departments is overseen by the General Insurance Management Committee, the Life and Pensions Management Committee and the Investment Committee.

The ABI is based at 51 Gresham Street in the City of London and currently employs around 100 staff.

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