European Union and United Kingdom Laws regarding motor insurance

In 1930 the UK government introduced a law that required every person who used a vehicle on the road to have at least third party personal injury insurance. Today UK law is defined by the The Road Traffic Act which was last modified in 1991.

The Act requires all motorists to be insured against their liability for injuries to others (including passengers) and for damage to other persons' property resulting from use of a vehicle on a public road or in other public places. This is called Third Party Insurance. It is an offence to drive your car, or allow others to drive it, without at least Third Party insurance whilst on the public highway, on private land no such legislation applies.

The insurance certificate or cover note issued by the insurance company constitutes legal evidence that the vehicle specified on the document is indeed insured. The Law says that an authorised person, such as the police, may require a driver to produce an insurance certificate for inspection. If the driver cannot show the document immediately on request, then the driver will usually be issued a HORT/1 with seven days, as of midnight of the date of issue, to take a valid insurance certificate (and usually other driving documents as well) to a police station of the driver's choice. Failure to produce an insurance certificate is an offence.

Insurance is more expensive in Northern Ireland than in other parts of the UK.

Motorists in the UK are required to display a Vehicle excise duty disc in their car when it is kept or driven on public roads. This helps to ensure that most people have adequate insurance on their vehicles because you are required to produce an insurance certificate when you purchase the disc. However it is a known practice for some people to purchase insurance to gain the certificate and then to cancel the insurance and gain a full refund within the statutory 14 day cooling off period.

The Motor Insurers Bureau compensates the victims of road accidents caused by uninsured and untraced motorists. It also operates the Motor Insurance Database, which contains details of every insured vehicle in the country.

Today there are different types of car insurance available, and dependent on your circumstance one policy will be more suitable than another. In order to buy the most suitable car insurance it is important to understand the differences between the policies available and the effect these differences will have on you as a policy holder and other road users.

In the UK , the car insurance market is comprised of different types of insurance companies such as Norwich Union, thousands of brokers, and direct insurers like Esure. Direct insurers revolutionised the insurance industry by advertising directly to the customer and reducing prices by excluding brokers from offering their products. Aggressive marketing ensured that direct insurers are seen as household brands, a direct contrast to brokers!

The result to the customer was a far greater choice of insurance companies but this made the prospect of purchasing the right policy at the right price more difficult. Today, if you use a broker to find an insurance policy you can only expect to search 40% of the available market; the other 60% is controlled by direct insurers!