Over 120,000 vehicles were seized by UK police in 2022 as a result of being uninsured. A study by the Motor Insurance Bureau discovered that typically, half of uninsured drivers are doing so unintentionally.
Between October and December of 2022, the study discovered that:
- 30% of drivers who are uninsured are because their policy had been unknowingly cancelled
- 10% were due to policies expiring
- 9% were because of drivers not driving within the terms and conditions of their policy
As well as having your vehicle seized, driving without adequate insurance can lead to hefty fines, points on your licence, and in some instances, disqualification from driving.
This highlights the importance of checking any policies you have, be them car insurance, or otherwise, to make sure you’re suitably covered.
What is insurance?
Insurance is a financial product that safeguards individuals, businesses, or organisations against loss, damage or theft by offering an agreed form of compensation. Many different types of insurance are available, such as car insurance, home insurance, and life insurance, among others.
Why is insurance important?
Insurance is important for several reasons...
- Financial Security: Insurance provides a safety net and helps protect against financial losses. For example, depending on the level of protection, car insurance can cover the costs incurred following an accident or theft. Home insurance can help rebuild or repair a damaged property. This can help individuals and businesses recover after unexpected events.
- Legal Requirements: In many cases, insurance is a legal requirement. For example, car insurance is mandatory in the UK, to ensure that individuals can cover damages in case of an accident. Similarly, employers may be legally obligated to provide workers' compensation insurance to protect employees in the event of work-related injuries.
- Risk Management: Insurance allows individuals, businesses, and organisations to transfer the risk of potential losses to an insurance company. By paying a premium, they can obtain financial protection against sudden events such as accidents, natural disasters, or illnesses.
- Peace of Mind: Knowing that you are protected by insurance can provide peace of mind. It allows individuals and businesses to focus on their daily activities and goals without constant worry about the financial consequences of unexpected events.
It's important to note that insurance policies have terms, conditions, and limitations, and coverage varies depending on the type of insurance and the specific policy. It is advisable to carefully review and understand the terms of an insurance policy to ensure adequate cover for your needs.
When is it a legal requirement to have insurance?
There are some forms of insurance which are a requirement in the UK.
- If you drive a car, you are legally required to be insured on it. As a minimum, ‘third party’ cover is needed, and means that if you, or in some instances someone for whom you have responsibility, caused an incident, your insurance would cover the costs incurred to the other parties involved. This level of protection does not provide cover for costs you may incur for the repair of your own vehicle, and you would need a more comprehensive policy for that.
- If you’re purchasing a home, some mortgage providers may require proof that you have buildings insurance in place. This is so if the worst were to happen, the mortgage company’s investment in you would be safe.
Other types of insurance, such as home contents cover may not be a legal requirement, but this doesn’t make them any less important, and it’s always wise to consider the costs you may encounter if something were to unexpectedly happen, and how you would manage it.
What is Insurance Awareness Day?
Insurance Awareness Day occurs on the 28th of June each year and serves to remind us to not put off thinking about our potential insurance requirements.
You may want to consider any aspects of your life, or possessions which you don’t have insured that could benefit from the service.
It can also be a prompt to review existing policies in the aim of checking they still fulfil their needs, e.g. have circumstances changed meaning your annual mileage could now exceed that which you have previously declared on your car insurance policy? Has the value of your contents increased / decreased, requiring a revisit of your home cover?
Don't put off checking your insurance
Depending on your circumstances, you may benefit from some or all of the below points…
- Check your existing policies
- Compare alternatives
- Identify areas in your life that you may not have insured, but would like to
People’s circumstances and requirements differ, so the correct insurance policy varies from person to person. Spending a little time researching your needs will help you to identify what’s suitable for you, and hopefully lead to an appropriate policy, and subsequent peace of mind.
To compare cheap car insurance quotes from over 100 UK providers, click here.
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