Statutory Policy Requirements

UK law outlines a minimum level of cover that any car insurance policy must provide. Your car insurance policy must be able to pay for costs incurred as a result of death or bodily injury of any other person involved in an incident concerning your vehicle, including your passengers. The policy must also be able to cover the costs incurred as a result of damage to any property involved in an accident concerning your vehicle. This should also cover any costs related to any emergency treatment required.

Great Britain's minimum level of cover must also be given if you drive abroad, except where that country's minimum requirement is higher than that of Great Britain's. In this case, the higher level of cover would apply.

Many insurance companies restrict your insurance cover based on the use of your vehicle. This means that you may only be covered when you use your vehicle for social, domestic and pleasure purposes. If you use your car for business purposes you must inform your insurer. Often, policies do not cover you if you use your car for purposes of a business or commercial 'character'. 'Car-sharing', for example, if your colleague pays you to drive them to your place of work each day, could be considered of a business or commercial 'character'. So that you are able to car share without losing your car insurance cover, The Road Traffic Act 1988 lists certain conditions that ensure car sharing is automatically covered by your insurance. An insurer cannot consider car-sharing to be of a business nature, if:

• Your vehicle is not adapted to carry more than eight passengers
• The fare, or average fare paid by your passengers does not exceed the running cost of that journey
• The fare arrangements were made before the journey began, especially where different fares are charged between passengers

The minimum total cover that your insurance must provide is £250,000. This is in respect of all liabilities you could incur as a result of an incident.

Exclusions
The insurance policy is not required to cover a person employed by you if they use your vehicle as part of their employment. It is also not required that the policy covers damage to your vehicle or any goods or personal belongings, whether carried for hire, reward, or simply owned by you or under your control.

Restrictions
Your car insurer cannot restrict your cover based on the following:

• your age, physical or mental condition
• the condition of the vehicle
• the number of people that the vehicle carries
• the weight or physical characteristics of the goods that the vehicle carries
• the time at which, or the areas within which, the vehicle is used
• the horsepower or cylinder capacity or value of the vehicle
• the carrying on the vehicle of any particular apparatus

There are exceptions. The insurer is not required to pay out if the following conditions apply/applied:

• The insurer was not informed within seven days of the accident
• The blame or responsibility of the accident has not yet been established
• You failed to disclose, or misrepresented, certain facts which would have altered your policy