Vehicle insurance

The law says that you must normally have at least third party motor insurance if you drive a vehicle. You must also have insurance if you leave it parked on the street, on your driveway or in your garage.

The police can check on the spot if your vehicle is insured using the Motor Insurance Database. If it isn’t they can seize it immediately, even if you then arrange insurance at the roadside. You’ll have to produce a certificate of insurance and pay charges to get your vehicle back. If you don’t, the police can dispose of your car 14 days later. If they sell it, you can claim money back from the sale.

Protect your no claims bonus

If you don't make a claim during the life of your policy, you start to build up a no claims bonus. As your bonus builds up over the years, you can save between 60 and 75 per cent on the cost of your motor insurance.

If you want to protect your no claims bonus, you can pay extra premiums to protect it. This means you have an accident or need to make another claim, your no claims bonus won't be affected. It's usually cheaper to pay the extra premiums to keep the discount.

Types of motor insurance

There are three main types of policy.

Third party

This is the minimum legal requirement and covers you for damage to someone else's vehicle or property or injury to someone else in an accident. This includes accidents caused by your passenger. It doesn't cover repairs to your own vehicle.

Third party, fire and theft

This includes third party and also covers damage or loss to your own car by fire or theft.

Comprehensive cover

This includes third party, fire and theft and repairs to your own car. Your policy may also cover:

• death or injury of yourself or a family member, up to a set amount

• cover for belongings stolen from your car

• cover for medical or legal expenses

• hiring a replacement vehicle.

Older drivers and travellers

If an insurer or broker can’t offer you insurance because of your age, most of them will refer you to an alternative insurer or give details of a signposting service such as the British Insurance Brokers’ Association’s (BIBA’s) ‘Find a Broker’ service .You can use this service to find specialist insurers who can offer specific types of cover based on factors such as age and medical condition.

You can find the BIBA’s ‘Find a Broker’ service by phoning their helpline on 0370 950 1790 or by going to their website at www.biba.org.uk.

You can find out about Age UK's over 50s car insurance at www.ageuk.org.uk.

You can find out about Age UK's travel insurance at www.ageuk.org.uk.

Motor cycle insurance

There are two main types of insurance:

• specified cycle policy - covers you to drive one specific bike

• rider policy - allows you to drive any motor cycle, up to a certain cc rating, with the owner's permission

There is usually a compulsory excess and you may not get a no claims bonus.

Cost of insurance

Since 21 December 2012, if you renew or buy a new policy, insurers can't charge men and women different premiums. They can use gender to work out how likely you are to claim, but then have to share the cost of covering this risk across all customers. For example, this means that a young woman may pay more for car insurance in 2013 compared with 2012, because her risk is shared with young male drivers who are likely to have an accident.

Choosing a policy

You should get quotes from several insurers and compare:

• what each policy covers and the exclusions and amount of any excess. any discounts offered

• any discounts offered

• the no claims bonus and how much the discounts are worth each year if you don't claim on your policy

• any policy restrictions, for example, only named drivers are covered

When asked you must give your insurer as much information as you can about yourself and your vehicle. They are likely to ask about:

• driving convictions

• accidents

• medical conditions which could affect your driving

This information will affect your premium and whether your insurer pays out on a claim.

An insurance policy should be in the main driver's name. An insurer can refuse to pay out if you take out insurance in your name because it's cheaper, then let someone else, for example a younger driver, drive most of the time.

When asked you must tell your insurer at once about any change in your circumstances, such as a change of address or job.

If you buy a vehicle on finance it usually has to be insured in your name.

Most policies run for a year and your insurer doesn't have to send a renewal notice, although most do.

When you take out or renew a policy you will get a cover note which is valid for up to 30 days while the policy documents are sent to you. It is an offence to drive without a policy or cover note.

Make sure you check out the terms and conditions when you sign up for insurance. With some companies you could be agreeing to have the policy automatically renewed after a year. This could include a cancellation fee if you cancel after the renewal.

You can cancel your insurance if your vehicle is sold, stolen or written-off. You should check your policy to see if you can get a refund on your premium.

When your insurance may not cover you

Your policy may not cover you, or only partially cover you if:

• someone not covered by the policy was driving

• you charge a passenger for a lift, unless this is on a costs-only basis

• your car is un-roadworthy

• you've bought a stolen vehicle, even if you weren't aware that it was stolen

• you're driving someone else's vehicle - it's is a criminal offence to drive, or allow someone to drive, a vehicle without insurance cover

• you don't have a valid driving licence

• your insurer thinks that you are partly to blame for an accident

• you've had to run up other costs, for example, vehicle hire- you may be able to claim these back from the other driver

• your insurer has gone out of business -you may be able to get compensation from the Financial Services Compensation Scheme

Driving abroad

If you buy a policy from an EU-based insurer you will have third party insurance to drive in any EU country. However, you may want to arrange extra cover.

Your policy may also give you third party cover in some non-EU countries. Check before you travel.

From 1 January 2021 you may need to do other things before driving in Europe. Check before you travel.

Get more help

If you need more help, you can contact your local Citizens Advice Bureau or Advice Direct Scotland's consumer service: