Liability Insurance Laws

Liability, or third party, car insurance has been around for a long time, and it’s been legally required in the UK since 1930. In 1988 the Road Traffic Act created new laws regarding it, and was updated again in 1991. The Road Traffic Act required all drivers on the road to carry third party insurance cover. Third party cover acts as a protection for other drivers so that if you cause injury to them or their vehicles you’re able to pay their costs. The only way to get out of having third party insurance is to make a deposit of £500,000with the Accountant General of the Supreme Court.

According to this law, you must carry proof of insurance with you while driving at all times and be ready to show it authorized persons who request it. This includes the police. If you can’t show proof of insurance at the proper time you will get a HORT/1, which allows you seven days to go to the police insurance with your proof. Failure to do so can result in fines and impounding of your car.

This has been the law for decades, but now it’s changed. Beginning in April 2011, it became illegal for anyone to even own a car without having third party cover. Previously you could drive on private roads or keep a car in the garage without having to insure it, but now you can’t even do that unless you submit a Statutory Off Road Notice to the Driver and Vehicle Licensing Agency. The reason for this change is that so many people were disregarding the existing laws. By some estimates, a million drivers a year go out onto British roads without having proper insurance. Accounting for this possibility causes car insurance companies to raise their rates an average of £30 a year per driver.

By the new laws, people owning a registered vehicle that does not show up in the Motor Insurance Bureau database will be sent a letter advising them of their need to purchase insurance. The possible penalties are similar to the ones previously imposed for driving without insurance.