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Having car insurance is a legal requirement and with the right level of cover, provides financial protection in the event of your vehicle being damaged. It will also provide cover for injuries to other drivers, passengers or pedestrians, and their property.

Accidents happen, so it’s reassuring to know that you’re covered financially if you’re involved in one.

The good news is that premiums are falling, reflecting the commitment of insurers to pass on the savings from reforms in the civil litigation system in 2013. For example, by legislating to protect insurers from fraudulent whiplash claims and claimant lawyers’ excessive costs, insurers are now able to be more competitive with their prices.

Figures from the Association of British Insurers show that the average premium fell by 3% to £358 in the first quarter of 2014.

Why is car insurance necessary?

Having car insurance is essential because it covers your expenses in the event of vehicle damage or injuries to other drivers, passengers or pedestrians.

All motorists must be insured against their liability to other people, as stipulated in the Road Traffic Act 1988.

Insurance can also provide financial support if your car is stolen, vandalised or destroyed by fire.

The only instance in which you don’t need it is if your vehicle has been declared off the road through a Statutory Off Road Notification (SORN) from the DVLA.

What if I’m not insured?

Driving without car insurance is illegal. If you don’t have it, you could be fined or disqualified from driving.

The maximum fine is £5,000, plus you’ll receive at least six penalty points on your licence.

The Government is currently reviewing penalties for uninsured drivers who kill or are involved in accidents.

The police also have the power to seize and destroy any vehicle being driven without cover.

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