Car insurance basics
Lesson 6 of 13 in our free Insurance guide: a 5-minute money game with the key points below.
This lesson is in the full version.
Free with a code from your uni, college, council, landlord or employer (worth £600/year). Lesson 1 of Insurance is free for everyone.
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Questions you'll answer
Annual price: £1,500. Monthly option: £140 × 12. How much extra does paying monthly cost over the year?
Quick facts
- Covers damage you do to other people and their stuff — nothing for your car → Third party only. The legal minimum.
- Adds cover if your car is stolen or catches fire → Third party, fire & theft. Third party PLUS fire and theft.
- Also covers damage to your own car, even if it was your fault → Comprehensive. The widest level — and surprisingly, sometimes not the priciest. Always compare.
- Fact: “Comprehensive cover can sometimes be cheaper than third party only.” — Odd but true — insurers price on who tends to buy each type. Compare quotes for all levels.
- Myth: “Adding a parent as a named driver (when you're really the main driver) is fine.” — Named driver is fine if true. Lying about who the main driver is = fronting = fraud.
- Fact: “Paying monthly can cost more than paying for the year up front.” — Monthly payments often include interest. Check the total.
- Myth: “Driving without insurance is just a small fine, no biggie.” — It means penalty points, fines, possibly losing your licence and the car being seized.