Car Insurance – What does it cover and other Frequently Asked Questions?

It is a legal requirement to have an insurance policy if you own a vehicle. Section 143 of the Road Traffic Act 1988 requires that a person must have at least third party insurance in place when driving a motor vehicle on public roads.

There are many different types of insurance and what the policy covers  depends on what level of cover you purchase. There are three different levels of car insurance:

This level of insurance will only cover third parties (other people/vehicles) and not any damaged caused to your own vehicle. This means that it will not cover any damage caused to your car. If damage was caused by you to your own vehicle you will have to cover the cost of repair or write off of your vehicle yourself.

This is similar to third party insurance. Again it will not cover the costs of damage caused to your car through your own fault, but it will cover repairs or replacement of your vehicle if it was stolen or damaged by fire.

This is the highest level of cover. It covers third parties and your own vehicle if you damage your own car, even if the accident was your fault.

But how far does your cover extend? What about all the extra things which you are not always informed about when purchasing your insurance?

Our best advice is always to check your policy documents, but below we address some of the common queries and misconceptions about insurance:

It is a common mistake to assume that once you reach a certain age, or a certain level of driving experience, your comprehensive insurance covers you to drive other cars. In many European countries the policy covers the vehicle so any driver is insured to drive it. This is not so in the UK. A comprehensive policy may still have a restriction to named driver(s) only.

If you plan to drive other vehicles and rely on your own insurance policy to cover you to do this, then it must be stated on your policy that you have coverage for driving other cars “DOC” included. “DOC” is a clause on your policy which allows you to drive someone else’s car without being a named driver on their policy.

If you are classed as a young driver, i.e. under 25, it is more than likely that “DOC” will not be available to you.

To find out if you have “DOC” on your policy you need to check your policy documents or speak to your insurer. It will state whether you have the “DOC” extension on your certificate of motor insurance. This coverage is not always included by default so do not presume you have it as you could get yourself into trouble for driving without insurance.

If you have a fully comprehensive policy on your vehicle with “DOC” coverage, this usually has some pre-requisites with it whereby you must have the owner’s permission to drive the vehicle and it is also often limited to cover you to drive third party, fire and theft.

“DOC” also often excludes coverage to drive a hire vehicle and may be limited to social and domestic use only.

It will depend on your insurer, but there are a few typical requirements common amongst most insurer, they are:

• You most likely need to be 25 or over when the policy starts
• Your policy must be fully comprehensive
• The other car must have insurance already
• Your own car must be in a driveable state

Driving other cars on your own policy will usually only cover you for third party damage. This is the lowest level of cover and means if you have an accident that is your fault you will be liable for the damage caused to the vehicle you are driving. “DOC” is not ideal as a long-term solution if you are looking for full coverage. It is much better to add a specific person as a named driver or even a temporary driver to your fully comprehensive policy, in which case the named driver would be fully covered.

New penalty points will undoubtably increase the cost of your driving insurance – but drivers are often unclear about when to inform the insurance company of newly endorsed penalty points or other penalties.

When you sign up to your insurance policy, you enter a contract and that contract provides an obligation for you to let your insurer know if your licence is endorsed with penalty points. If you do not do so, you could risk invalidating your car insurance.

Some insurance providers want to know immediately or as soon as your licence has been endorsed with the points. However, some insurers may only need to know when you renew your policy. Make sure you check your own policy documents to know when your insurer requires you to inform them.

To be safest you may prefer to inform your insurer as soon as possible to avoid the risk of invalidating your insurance. You may find your insurance stays the same for the rest of the policy year and then will increase on renewal. Most insurers ask you to declare any driving convictions within the last 5 years. The points will be removed from your driving record after four years, but you still need to declare them for a further year.

Some offences carry an option to participate in a speed awareness or similar course instead of penalty points. Typically, insurers do not require notification of attendance on a course but again, you should check the specific terms of your policy.

Research shows that your insurance is likely to increase if you are penalised with penalty points.

Our cost calculators could help you to establish a broad idea of the likely increase you face.

Although nobody wants to see their premiums rise, the result of not declaring your penalty points to your insurer could be that your insurance is invalidated. This means your car is effectively uninsured and this could result in prosecution and a further 6 – 8 points.

It could also prove to be even more costly if you are involved in an accident and your insurance claims back any payment they make out because you did not tell them about the points in accordance with your contract.

If you are worried about the cost of your insurance increasing, shop around. Different insurers treat penalty points differently. You may also find it cheaper to choose a one-off payment of insurance rather than monthly instalments.

Using your personal car to earn some extra cash has become an easy option, particularly during the Covid-19 crisis with delivery driving being in demand more than ever. With apps such as Deliveroo, Just Eat and UberEATS on your personal device, it has never been easier to become a fast-food delivery driver and earn some extra money on the side.

However, fully comprehensive insurance will not cover you for these types of trips. Comprehensive insurance usually only covers you for trips which are either Social, Domestic and Pleasure or Commuting. So, if you want to use your vehicle to earn extra cash, you will need to invest in extra insurance cover.

You will need to have Hire & Reward Insurance in place. Not all insurers offer this type of cover but there are many insurance company’s set up for this sole purpose. Hire & Reward cover can be bought on a permanent basis, or as pay as you go. ZEGO offers insurance for the time you are delivering food from as low as £1 per hour.

Whatever you do, make sure you add extra insurance before using your personal car as a money maker. If you have an accident whilst making a delivery, without adequate insurance in place, your insurance will be invalid, and the consequences could be costly.

Your policy documents will tell you what is covered and what is not. Many policies specifically state that you will not be covered if you are driving under the influence. Policies often state that if a driver is found to be unfit or over the legal limit due to drink or drugs or fails to provide a specimen without lawful reason, your insurance will not cover you.

However, even if the drink or drug driving policy exclusion applies the insurance company is required by law (s.151 of the Road Traffic Act 1998 to be precise) to pay out to third parties at the very least. This means any injury or damage caused to a third party will be paid by the insurer. However, the insurer can potentially claim these costs back from you.

In addition to the fact that drink driving could make your insurance invalid and cause you to have to bear the cost of damage alone, it may also cause you to struggle to get insured altogether in the future. Many insurers outright refuse to insure a person who has had a previous drink or drug drive offence. Those insurers who do remain in the market certainly take advantage of the smaller insurance pool and insurance costs can double following a conviction of this type.

Our Cost Calculators could offer some useful idea of the likely cost of insurance after a drink driving conviction.