Q&As

What is motor vehicle or road traffic accident insurance?

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Produced in partnership with Hannah Laithwaite of Lamb Chambers
Published on LexisPSL on 20/07/2017

The following Insurance & Reinsurance Q&A produced in partnership with Hannah Laithwaite of Lamb Chambers provides comprehensive and up to date legal information covering:

  • What is motor vehicle or road traffic accident insurance?
  • Types of motor insurance policies
  • Validity of UK insurance policies in the EU
  • Insurance premiums
  • Claims hierarchy—the contractual and statutory insurer

What is motor vehicle or road traffic accident insurance?

In the UK, motor insurance is a mandatory insurance policy for any vehicle owner or driver unless the vehicle is declared as off the road. There are heavy penalties, both civil and criminal, for uninsured drivers (who are caught). The mandatory insurance regime is intended to protect the general public (including pedestrians and other non-vehicle users) against personal injury and damage caused in a road traffic accident.

Types of motor insurance policies

The motor insurance market is split into three main types of insurance: third-party only; third-party fire and theft; and comprehensive policies:

  1. third-party only policies provide the minimum level of cover required by the law, namely the Road Traffic Act 1988 (RTA 1988). RTA 1988 mandates that motor insurance must at the very least cover the risk of death, personal injury or property damage to third parties caused by the insured vehicle

  2. third-party fire and theft provides third-party cover as described above but in addition insures the vehicle itself against damage, theft or destruction by fire, and

  3. comprehensive insurance is, as per the name, the most comprehensive vehicle insurance cover available. It provides cover in respect of vehicle damage, theft or destruction by fire, death or personal injury to other persons and damage to their vehicles, medical expenses and accidental damage, and the cost of replacing vehicle

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