In the current financial climate, here in the UK, why do you take out car insurance when it is likely to cost a few hundred pounds per annum to insure your car?
Well, the first thing to bear in mind is that if your car is on the public road network and is not declared SORN (Statutory Off Road Notification) then you are legally obliged to insure the vehicle for a minimum of third party insurance.
If you do not, the penalties are severe with the possibility of a £100 fixed penalty fine, your car could be wheel clamped, or impounded or even destroyed. You could also face prosecution by the court and receive a fine of up to £1,000.
So, they are the legal reasons why you will no doubt wish to make sure your car is adequately insured, but why else would you want to insure your car?
Well, if you have just paid perhaps £30,000 for a new car and driven it off the forecourt only to hit the rear end of the Bentley in front of you that had stopped at a set of traffic lights because you had not familiarized yourself fully with the various controls and gadgets, how are you going to feel?
The short answer is – not very good because where are you going to find the money to pay for the repairs to both your car and the expensive Bentley you have just hit and the medical bills of the driver and passenger in the Bentley to pay for their whiplash injuries?
This is one of the very good reasons why you would wish to have car insurance in place. The situation would have potentially been worse had you been travelling at speed on a motorway as the impact may have resulted in a greater amount of damage to the cars involved and even the death of some of those involved. By having car insurance in place will ensure that you have adequate legal and financial support available to deal with the repercussions of the accident.