# Car Insurance

> The legal minimum cover, the difference between third-party and comprehensive policies, what affects your premium and your rights if an insurer fails.

Canonical page: [/insurance/car-insurance](/insurance/car-insurance/) · Last reviewed: 2026-08-22

Car insurance is a legal requirement if you drive on UK roads, and the level of cover you choose affects both what you pay and what you are protected against. Here is how it works.

## Key information

- At least third-party cover is required by law to drive on public roads
- Comprehensive policies also cover damage to your own car
- Your premium depends on the car, the driver and how the car is used
- The compulsory element of motor cover is protected 100% by the FSCS if your insurer fails

## Levels of cover

UK law requires every driver to hold at least third-party motor insurance, which covers injury to other people and damage to their property but not to your own vehicle. Beyond this legal minimum, insurers offer wider levels of cover that trade a higher premium for more protection.

Choosing the right level is a balance between cost and the protection you want. It is worth comparing what each level actually includes rather than assuming a more expensive policy is always better value for how you use your car.

- Third-party only — the legal minimum; covers other people and their property, not your own car
- Third-party, fire and theft — adds cover if your car is stolen or damaged by fire
- Comprehensive — also covers damage to your own vehicle, sometimes with extras such as a courtesy car

## What affects your premium

Insurers set premiums using their assessment of risk. Factors commonly include the make and value of the car, where it is kept, your age and driving history, how many miles you drive and what you use the car for. A no-claims discount, built up over years without a claim, can reduce the cost.

- The car itself — value, engine size and insurance group
- The driver — age, licence, claims and any driving convictions
- Use and mileage — commuting, business use or occasional driving
- Your [voluntary excess](/insurance/making-a-claim#excess-and-payouts) and any no-claims discount

## Keeping your cover valid

When you take out or renew a policy you have a legal duty to take reasonable care not to give the insurer [wrong or misleading information](/insurance/complaints-rejected-claims#why-claims-are-rejected). Getting details wrong — even innocently — can leave you underinsured or a claim refused, so check that the car, the drivers and the way the car is used are all recorded correctly.

## No-claims discount and driving uninsured

A no-claims discount rewards each year you drive without making a claim and can build up to a substantial reduction over several years. You can often pay to “protect” it, which lets you make a set number of claims without losing the discount — though this protects the discount, not the overall price, which can still rise. Your no-claims record does not transfer automatically, so keep proof of it when you switch insurer.

Driving without at least valid third-party insurance is a criminal offence. The police can issue a fixed penalty of £300 and six penalty points, and can seize the vehicle. If the case goes to court you could face an unlimited fine and disqualification. Under continuous insurance enforcement you can also be penalised for keeping an uninsured vehicle even if you are not driving it, unless it is formally declared off the road with a SORN.

## Your rights

- If your insurer fails, the compulsory (legally required) element of motor insurance is protected 100% by the Financial Services Compensation Scheme; other parts of the cover are generally protected at 90%, with no upper limit.
- You have a legal duty to take reasonable care not to make a misrepresentation when applying; in return, an insurer cannot simply refuse a genuine claim without a proper reason.
- If you are unhappy with how a claim or policy has been handled, you can complain to the insurer and escalate free of charge to the Financial Ombudsman Service.

## Official sources

- [How the FSCS protects insurance](https://www.fscs.org.uk/what-we-cover/insurance/)
- [Financial Ombudsman Service](https://www.financial-ombudsman.org.uk)
- [Check a firm on the FCA Register](https://register.fca.org.uk)

## Related

- [Making a Claim](/insurance/making-a-claim/)
- [Insurance Renewals](/insurance/insurance-renewals/)
- [Complaints & Rejected Claims](/insurance/complaints-rejected-claims/)
- [FSCS protection explained](/banking-savings/fscs-protection/)
- [Financial Directory](/tools-calculators/financial-directory/)

## Sources

- FSCS — [Insurance protection & compensation](https://www.fscs.org.uk/what-we-cover/insurance/) (accessed 2026-08-22)
- MoneyHelper — [Car insurance](https://www.moneyhelper.org.uk) (accessed 2026-08-22)
- ABI — [Motor insurance](https://www.abi.org.uk) (accessed 2026-08-22)