If you are a motorist in the UK, you will no doubt be aware that it is a legal requirement to make sure that you have adequate insurance for your car unless the vehicle is declared SORN (Statutory Off Road Notification) and is kept off public roads. There are three levels of cover – fully comprehensive, third party fire and theft and third party insurance. As a minimum, you must have third party insurance but why is car insurance a legal requirement?
Well, third party cover will pay out should you be involved in say a road traffic accident and will cover damage to other vehicles, passengers or property. This level of cover will not pay out for the cost of damage to your own vehicle. So, it provides you with financial protection should you be liable for such claims due to the things we have just mentioned whilst driving your car.
For instance, if your car was responsible for a road traffic accident involving say a BMW worth say £50,000 for insurance purposes that was written off, your insurer should meet the cost of a claim on behalf of the owner of the BMW. You may have to pay an excess on the policy thus paying only a very small part of such a claim with your insurer paying most of the £50,000. Most people do not have a spare £50,000 to hand over.
Another example could be where your car accidentally hits a pedestrian who runs unexpectedly into the road in front of you. The pedestrian survives but is so badly injured that he or she is never able to work again and is brain damaged and confined to a bed for the rest of their life and requires 24/7 care. The cost of such things as loss of income and care could run into millions of pounds and this is where your car insurance provider would probably have to meet such a claim rather than you be sued for millions of pounds. Most people would be unable to meet the financial cost of this magnitude from their own personal resources.
Hopefully, if you were in any doubt as to whether it was worth breaking the law by taking a chance and driving your car on public roads without suitable car insurance in place or whether you should have suitable cover in place you will now realise the potential benefit of such cover.