How to Choose the Best Car insurance in United Kingdom

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Insurance in the UK is compulsory. The law states that you must insure all vehicles if you drive them or keep them in public places to at least the level of third-party liability. This is unless they have been declared ‘off the road’, which can be done if the vehicle is not being used.

Car insurance is, therefore, big business in the UK. In fact, there were around £10 billion of premiums in 2018. This makes it one of the biggest motor insurance markets in the world and there are more car insurance providers in the UK than anywhere else in Europe. There are over 200 car insurance providers in the UK. Some of the biggest include:

  • Aviva
  • AXA
  • Direct Line
  • RAC

Because of this, it pays to shop around for insurance and make sure you get a deal that suits your needs.

UK car insurance typically covers the vehicle rather than the driver. This means that you aren’t automatically insured to drive other people’s cars. However, some comprehensive insurance policies permit this.

When you take out a car insurance policy in the UK, you specify who is on the policy. Couples can get insurance with both partner’s names on the policy if they both drive, while you can also add additional drivers.

As auto insurance in the UK applies to the vehicle, multiple vehicles requires separate insurance plans. However, many companies offer discounted rates for a second car.

The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) both regulate car insurance companies in the UK. The UK Motor Insurance Database contains records of all insured vehicles. The police can spot-check vehicles to make sure that they have insurance.

See even more information in our guides to insurance in the UK and driving licenses in the UK.

Can you use car insurance from another country in the UK?

At present, you can use valid vehicle insurance from other EU countries in the UK. However, this may well change as a result of Brexit. Non-EU/EFTA nationals need to purchase a UK insurance policy to drive in the UK.

Types of car insurance in the UK

The three main types of car insurance in the UK are as follows.

Third-party liability

This is the minimum legal coverage. It covers all damage caused to third parties and their property. This includes all damage to other vehicles, injury to others and damage to property (e.g., buildings, lampposts) in incidents where you or another insured driver of your car is at fault.

Third-party, fire, and theft

This includes all standard third party liability coverage plus it also covers repair or replacement costs if your vehicle is stolen or damaged by fire.

Some policies also offer to cover damage caused by other accidental damage such as storm damage.

Fully comprehensive

The highest level of coverage which will also pay out for damage to your own car in incidents where you are at fault. Some policies also cover the owner of the policy to drive other vehicles.

Although this is the most extensive form of car insurance, most policies will have some exclusions – usually related to intentional damage – so it’s important to check that you have the right level of coverage before signing up.

Car insurance costs

Car insurance costs in the UK will depend on factors including:

  • insurance type;
  • vehicle value;
  • driver age, history and profile;
  • what you will use the vehicle for.

The average cost for car insurance in the UK in 2018 was £431 a year. This is among the highest in the EU.

You can look to lower your annual car insurance premiums by:

  • reducing risks associated with your car – for example, fitting sensors or installing an alarm to reduce the risk of theft;
  • taking out telematics (also known as ‘black box’) insurance that sees a device fixed to your car that tracks your driving habits. If you’re a safe driver, you could see reductions on future premiums;
  • paying the annual amount upfront rather than in monthly installments;
  • increasing your excess – this is the amount you will need to pay against any claim. For example, if you have an excess of £100 and the value of the claim is £500, the insurer will pay £400. All insurers have a compulsory excess but you can voluntarily increase this to bring down the premium;
  • if you are a young or inexperienced driver, you can add drivers with a good driver profile to the insurance policy.

Additional forms of car insurance in the UK

You can purchase additional forms of car insurance in the UK to mitigate against further risks. These include:

  • Breakdown insurance – covers costs of a roadside breakdown, such as repair, getting the car towed away, and sorting out replacement transport;
  • Warranty – covers any mechanical faults with the car. This is often included with new cars, but some companies offer an additional warranty, such as MotorEasy.
  • Legal insurance – covers legal expenses in the event of an incident that goes to court;
  • No-claims protection – protects your no-claims bonus in the event of making a claim. You will usually need to wait until a minimum no-claims period has elapsed (e.g. 3 years);
  • Personal accident insurance – covers any medical costs that would otherwise need to be met;
  • Driving overseas – at present, UK insurance policies cover cars taken to EU countries but this may change. You can extend your policy to cover additional countries at the same level as your UK policy;
  • Lost or stolen keys – covers the cost of replacements.

Car insurance bonuses and penalties in the UK

The UK operates a ‘no-claims’ discount system, which allows people who haven’t claimed on their insurance in a number of years to obtain a substantial discount.

Each insurance company operates its own no-claims scheme, but it’s usually possible to get discounts of 50-80% on your annual premiums for long periods without making a claim (e.g. 10+ years).

Most companies will add on a percentage discount for each claim-free year, for example you’ll get 30% discount after the first year and this will then rise by 5% each year until you reach the maximum.

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It is often possible to transfer no-claims periods to other companies if you switch insurer. However, insurers are not obliged to do this so check before signing up if this is something you want to consider. Most companies will omit any claims where the policy-holder is not at fault, for example theft or accidental fire damage.

Companies reward no-claims periods, but they also penalize drivers with a poor driving record. Expect to pay a higher premium if you:

  • have been involved in any road accidents that were your fault;
  • have points on your driving license for things such as speeding or drink-driving;
  • are a young or inexperienced driver.

Car insurance companies in the UK

There are over 200 car insurance providers to choose from in the UK. This is why it pays to shop around. Some of the biggest and most well-known companies include:

  • Admiral
  • Aviva
  • AXA
  • Churchill
  • Direct Line
  • RAC
  • Saga

In addition to these, there are also companies such as Tempcover that offer temporary car insurance. Policies start from a single hour, which could give you some much-needed cover at short notice. You can find out more information on individual companies by checking out our UK business directory.

Compare policies using a comparison website such as Confused.com, Go Compare, and MoneySuperMarket. You can also check reviews of different companies on the Which? website.

Choosing car insurance in the UK

You can take a number of different factors into account beyond the premium costs when shopping for car insurance in the UK. These might include:

  • No-claims bonus – what discounts are offered and what is the policy around transferring bonuses from elsewhere?;
  • Policy coverage – what is excluded from standard coverage, can this be added on if necessary and at what cost?;
  • Excess/deductible options – what is the mandatory excess and what are the options for choosing to increase it?;
  • Company reputation – how does the company perform in reviews and what is the customer feedback like?;
  • Claims process – how straightforward is it, what is involved and what do the reviews say about how it works in practice?;
  • Roadside assistance – does the company offer a good breakdown assistance policy?

Applying for car insurance in the UK

To take out car insurance in the UK, you will typically need to provide:

  • the car registration number;
  • your address;
  • driving license information;
  • other personal details (age, driving history, etc.);
  • information on what you’ll use the car for (business, leisure, etc.)

Most insurance companies nowadays allow you to take out a policy and provide supporting documentation online. Each company will have its own specific applications procedure which will be detailed on its website.

Once you are insured, you should receive:

  • your insurance policy;
  • EU accident statement form, to use in the event of an accident (this may change after the UK leaves the EU. Your insurer may issue you with another type of report form after Brexit);
  • insurance green card, which is needed if you drive in any country not part of the European Green Card system. After Brexit, UK drivers may need a valid green card if they drive their car to EU countries.

Making a car insurance claim in the UK

If you need to make a claim to your insurer, you should do the following. In the event of an accident, make sure that you:

  • contact the police if the accident is serious or anyone is injured;
  • exchange contact details with any other parties and witnesses;
  • get the relevant information from the other driver, especially car registration number and insurance policy number
  • take photographs of the damage if you can;
  • fill in your EU accident report form and insurance claim form as soon as you have time;
  • submit your claim to your insurance company either online or over the phone. Each company will have different exact procedures which they should inform you of when you take out a policy.

Car insurance claims in the UK can usually be made up to three years after the incident, although this can vary between providers. Check your claims policy for details.

Canceling a contract or changing provider

You can cancel your car insurance contract with one provider and switch to another at any time. All insurers should by law offer a 14-day “cooling off” period after you sign up, where you can cancel and get a full refund on any amount paid.

However, if you cancel after this period, you may be liable for to pay fees. If you’ve signed up for a year-long contract, which is the standard, you can usually annul the contract if you want to terminate it or switch provider part-way through.

The good news is you won’t be charged for the full year and can usually get a refund if you’ve paid annually upfront, but insurance companies usually charge cancellation fees and sometimes additional admin fees. These should be explained to you when you sign up.

Many UK car insurance policies include an auto-renewal clause, meaning that you will automatically be signed up for an additional period if you don’t inform the company otherwise before it runs out. Beware of this and shop around for cheaper deals well in advance of the expiry date on your policy.

Making a complaint about a UK car insurance company

If you feel you have been unfairly treated by a UK car insurance company and want to complain, you should follow these steps:

  • write a letter of complaint to your insurance company. They will then have eight weeks to resolve the complaint and inform you of their decision;
  • if you are not happy with the decision, you can take the complaint to the Financial Services Ombudsman. You could be awarded compensation up to £150,000 if the complaint is upheld;
  • if you are still not happy, you can take the complaint to the Small Claims Court. It’s unusual for this court to rule differently than the Ombudsman, so you should be sure that you have a legitimate grievance before pursuing this. Find your local small claims court here.
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Roadside assistance in the UK

You can purchase breakdown assistance coverage through most UK car insurance companies. Alternatively, you can join a membership organization such as the Automobile Association (AA) or the Royal Automobile Club (RAC). Breakdown assistance providers in the UK include:

These groups cover the costs of emergency repair, car replacement, and repatriation if abroad. You can purchase a policy that covers you for just the UK or extend it to other EU countries. Costs depend on what kind of coverage you want but start at around £6 a month. You can compare breakdown assistance providers using comparison websites such as uSwitch.

How to get the best value car insurance for your set of circumstances and budget

To find the right insurance policy for your situation, you will need to shop around. Each insurance provider offers something a little bit different, and it could be a particular feature or benefit that makes them the best option for you. 

Scouring through various comparison sites can turn into hard work. That’s why we’ve put together a list of some of the top dogs when it comes to car insurance to help you find the best UK car insurance providers. The following should give you an idea of what to look for.

Best car insurance for experienced drivers

Direct Line

Direct Line is one of the biggest and best UK car insurance companies. Economies of scale do matter in the insurance business and many drivers prefer the reassurance of a car insurance provider that they feel will offer high levels of customer service in the event of a claim. 

Direct Line says it always tries to offer cheap car insurance quotes and makes a point of safeguarding your no claims bonus if the worst happens  – something which will appeal to experienced drivers. The company offers discounts when insuring multiple cars within the same household and also for young drivers who allow the use of telematics to monitor their driving performance. Direct Line is therefore a good option for both inexperienced drivers and those who, based on telematics, are considered safe drivers aged under 25, as well as households with more than one car.

If you’re looking for electric vehicle car insurance, there is a bundle deal on offer from Direct Line which could help reduce EV charging and parking costs.

Get a car insurance quote from Direct Line

Best car insurance for comprehensive cover

Aviva

Aviva is another top UK car insurance company that offers their customers comprehensive policies with valuable extras. With Aviva, you can get comprehensive or third party, fire and theft insurance with uninsured driver protection included in both. If an uninsured driver hits you, you’ll be refunded for any excess you had to pay, saving you money on legal expenses.

Aviva also provides transport after an accident to get you home safely and guarantees any repairs done to your car, ensuring that the work is of good quality.

You can also add multiple optional extras to your policy with Aviva, such as Multi Car cover, which is perfect for families with more than one vehicle. This is made even better with the no-claim discount applied to each vehicle you insure. Although this Multi Car cover is beneficial, it may not be great if you have young drivers, as you’ll have to pay an additional £300 on your compulsory excess when making a claim.

In addition to the standard protection you’d expect, the company’s comprehensive policy also gives you cover when driving other cars and motor injury protection. You can also insure electric and hybrid vehicles and cover personal belongings.

Get a car insurance quote from Aviva

Best car insurance for new cars

Natwest

Natwest’s car insurance product can be a tough policy to get, as it’s considered a premium product by the bank, which in their own words, is ‘tailored to the needs of our affluent customers.’ This means that car insurance from Natwest will likely involve a higher insurance quote. Despite that, its benefits are impressive, and it is one of the best UK car insurance options for those driving a new car.

With Natwest car insurance, you can easily insure multiple cars under one policy, with each driver getting a no-claim discount that they can keep. If a car ends up being written off within 24 months of its registration, Natwest will provide you with an exact replacement, making it a policy best suited for owners of newer or more expensive cars. 

Natwest is also one of the best car insurance UK providers for those who regularly travel in Europe, as you’ll automatically get cover for up to 90 days with their policy. Plus, for those who travel in the UK, you can also bundle a breakdown service provided by Green Flag to get total protection for all kinds of situations. 

In addition, if having taken out a policy you decide Natwest isn’t for you, you will not have to pay an administration or cancellation fee.

Get a car insurance quote from Natwest

Best car insurance for existing members

RAC

Better known as a breakdown cover provider, RAC offers multiple insurance options, ranging from third party to comprehensive cover, while offering black box, temporary, and insurance for learner drivers. 

RAC is well regarded, rated 5-star on Defaqto and picked up the Insurance Provider of the Year award in 2019 from Moneyfacts, making it one of the best UK car insurance providers of the year. RAC is a cheaper option if you’re already a member, as you’ll get an automatic 22% discount, meaning that bundling your services can save you a lot of cash.

Their Car Insurance Plus package offers unique vandalism protection. It also covers some specific components of your car, such as window glass, replacement locks and cover for any car accessories and personal belongings.

RAC is committed to offering cheap car insurance and even provides valuable tips and advice on how to reduce the cost of your insurance.

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Get a car insurance quote from RAC

Best car insurance with breakdown cover

AA

AA is another top UK car insurance company which offers cheap car insurance quotes that start at £165 for the year. In addition, you can also add AA’s industry-leading breakdown cover for £15 a year, making it one of the cheapest ways to add breakdown cover to your insurance. Focused on keeping you on the road if you’re ever in an accident, AA will provide a courtesy car, no matter who’s at fault for the damages. 

AA’s cheapest cover is fairly basic and stripped back. Still, you can customise it with extras and enhancements, such as 21-day car hire and excess protection that will allow you to claim your excess back if you’re at fault when in an accident. You can also get personal accident cover that provides financial aid if you’re injured in an accident.

However, even without these extras, AA insurance is a great option as the added breakdown cover provided for just £15 gives your car well-rounded protection for all kinds of damages and issues.

Get a car insurance quote from AA

Best car insurance for classic cars

Smart Cover

Smart Cover provides specialist cover for classic car owners, offering breakdown cover that can help make your classic car ownership experience run smoothly. With Smart Cover, you’ll get roadside assistance that can either fix your vehicle right where it broke down or arrange transport to repair it at a local garage. 

In addition to providing help in the UK, insurance from Smart Cover is also valid in Europe, where you’ll be able to access roadside assistance and get the car returned to the UK if you cannot drive it. 

The service offered by Smart Cover is not the same as regular car insurance, as it won’t provide the usual support if your vehicle is in an accident. It will cover the costs of repairs, but there will be expenses that you won’t be covered for so you will need a specialist classic car insurance policy too.

Get a car insurance quote from Smart Cover

FAQs

What are the different types of car insurance?

There are different levels of cover you can get with your car insurance. The most basic is third party car insurance. This type of insurance is a legal requirement and covers the costs of any damages to another car you may have been in an accident with. 

Third party, fire and theft provides additional cover and added reassurance of knowing that if your vehicle is stolen, lost, or has suffered fire damage you’ll be covered

Most people in the UK, however, tend to choose fully comprehensive car insurance for the high level of reassurance it provides. Cars are expensive items to repair or replace and comprehensive cover will protect you from any and every eventuality, provided they are not excluded under the terms and conditions. 

Additionally, many providers will include bundles and extras in these policies, such as roadside recovery. This means you can get a good amount of value from this type of insurance.

Which level of cover should I choose: Third party or fully comp

The level of coverage you should go for will depend on factors such as your age, driving experience, the value of your car, and location. 

If you live in an area where car theft is higher than average, that would be a good reason to get at least third party, fire and theft.

For those driving new cars or cars of high value, comprehensive cover will be the best option as it will likely allow you to get a replacement model of similar value if the vehicle is written off. 

Alternatively, if your car is low value and old, you may save some money by only getting third party insurance. This is because the premium, fees, and extra charges involved with comprehensive cover may not be worth it if your car is valued under £1,000. 

If you’re worried about how to beat rising insurance premiums, you could reduce how much you have to pay by getting basic, third party insurance. However, you need to assess your situation and determine that it provides enough cover for you. Ask yourself; how would I fund the purchase of a replacement car if my existing one were to be written off?

How to reduce the cost of my car insurance? 

The cost of your car insurance is affected by many factors. Some of these factors can’t be changed, such as your age and driving experience. However, you can try a few things to get cheaper car insurance premiums. 

One way to get cheaper quotes is to seek out cars in lower insurance groups. Build up your no-claims discount by driving safely and avoiding making claims should also reduce your premiums over time, as will increasing how much you put in as your voluntary excess. 

Passing an advanced motoring qualification for new drivers can also help reduce costs, and using a telematics ‘black box’ to monitor your speed and distance covered is also considered advantageous by insurers. If you have a garage or dedicated off street parking, that will be taken into consideration by providers and may reduce your insurance costs.

Our verdict: What is the best car insurance in the UK?

Each car insurance provider will have their own benefits that work best in different circumstances. For example, if you’re already an existing member, then RAC is a great option thanks to the large discount you can get. However, if you’re getting insurance from a new company, Aviva is a good option, particularly if you’re looking for comprehensive coverage that includes added benefits and enhancements. 

For those looking to combine breakdown cover with their car insurance to get complete coverage for all types of damages, AA remains one of the best car insurance UK providers, thanks to the low costs of adding it to your policy.


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