Why do we need motor insurance? Well simply because there is the risk that we pose when we drive to other people and their property. Section 143 of the Road Traffic Act 1988 (amendments made along the way) states that every car driven on the public roads must have at least third party insurance. Third party cover basically means that any person other than the insured himself will be indemnified of any losses or injuries they incur. The law is very clear in this area, and the crime is strict, meaning that no mens rea need be proven in order for the accused to be guilty, either you have insurance or you do not. If the insurance does not cover you for the instance in which you are being questioned, then you will be guilty of this crime (except in ONE instance), which carries endorsements. Please see the Endorsements pages for full details. For details of the exemptions to this clause please see the Exceptions and Defences page.
Insurers are regulated by the FSA and offer Insurance Products, one of which is motor insurance. They use a variety of methods to calculate premiums, but mostly this is based on a myriad of statistical data and probability.
The statistical data has to be used, together with the calculations because of the glaringly obvious fact that although we are all unique and individual, we all seem to do very similar things and will be affected by very similar environment circumstances. Therefore the following statistics, aswell as others, are considered:
Your driving experience.
Your No Claims Bonus
Your vehicle (some elements are weighted less than some people think).
- Vehicle value
- Vehicle replacement parts value
- Vehicle safety record
- Vehicle performance
- Vehicle attractiveness to theft
- Vehicle security devices
Your previous driving history and types of cars (most relevant when insuring exotic cars such as Ferrari, Porsche, Lamborghini, TVR and similar cars)
Advanced driver education