Young drivers' insurance

Tips, discounts, cashback & more

Drivers under 25 have always faced huge car insurance bills due to the higher risk of being in (or causing) an accident. The cost of cover has rocketed by 46% and the average premium for under 25s is now more than £2,000/yr. Yet never assume your renewal is the best deal. Many save £100s following our tried-and-tested cost-cutting tips.

Still learning? See our Learner Drivers' Insurance guide for full help.

What is young drivers' insurance?

Your age is one factor that insurers use when working out how much to charge you for car insurance, but it's not the only thing (see what affects your car insurance quote). There's therefore no such thing as 'young drivers' insurance', as most car insurance policies are open to anyone.

However, as many young drivers have little driving experience and will typically face expensive insurance costs, we've written this guide with extra tips and tricks to try, such as considering black box insurance.

Like all car insurance, young drivers will usually have the choice of three main levels of cover (see more detail in types of car insurance explained):

  • Third party only. This covers damage to someone else or their property.

  • Third party, fire and theft. As above, but cover if your car is stolen or catches fire.

  • Comprehensive or 'fully comp'. On top of third party, fire and theft, you can also claim the costs of repairing or replacing your own car if you were at fault and caused the accident.

Want bespoke tips? Try MSE's Car Insurance Compare+ tool

You could save £100s by switching car insurer. Our advice has always been to never just auto-renew – instead combine comparison sites to scour 100s of insurers in minutes.

MSE's new Car Insurance Compare+ tool is designed to take the hard work out of finding the cheapest quote. You just...

  • Fill in one questionnaire. We've borrowed MoneySupermarket's (so if you've used it before, your answers can be auto-filled)
  • Get MSE cost cutting tips as you answer. Like our Job Picker tool which show legit job description tweaks which can cut costs.
  • See your cheapest insurers as a benchmark. These are from the comparison, so you can see them straight away but of course we want you to beat them...
  • Personalised tips to cut costs further. These include whether delaying your quote a few days can lower cost, whether you should add an additional driver, check multicar policies, often with one click checks to see if it helps.
  • Whether to try other sites to find cheaper quotes. We assess if Direct Line (which isn't in comparisons) is likely to be cheaper for you, and give you our latest comparison site order of others to try.

As Emma emailed: "Thank you for this tool. My daughter (20) just passed her test. We liked how easy it was to tweak things (start date, job description, adding second driver) and see the cost impact. She now has a year's insurance at under £60 a month, which is amazing, as well as a new life skill and the confidence that she'll be able to sort out her insurance next year with the tool."

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How to cut costs for young drivers' car insurance

Here are our top car insurance cost-cutting tips for young drivers that can save you £100s.

  • There are three different types of car insurance:

    • Third party only
    • Third party, fire and theft
    • Fully comprehensive.

    Logically, third party insurance should be cheapest for young drivers as it offers a lesser level of cover than fully comp, yet this isn't always the case.

    The rationale is that insurers think people who choose third-party insurance are more of a risk. In one low-risk young driver quote, we found an annual £1,500 saving for having comprehensive cover over a third-party only policy.

  • Adding a second driver should push the cost up, yet bizarrely it can cut your costs. We tried adding a 40-year-old family member as an 'occasional' user (not a main driver) to an 18-year-old's policy which cut the premium by around £1,000. These seven tips show how it can cut your costs...

    • Car insurance is all about risk. That's why it can work, if you're a high-risk driver and you add someone who is a much lower risk as a 2nd (and/or 3rd) driver, they can bring down the average risk and you may get a cheaper policy.

    • This isn't just for young drivers. While it works well for young drivers as they are automatically seen as a high risk and know many people, like their parents, who may be lower risk it can work for anyone – but of course is especially powerful for those with costlier insurance.

    • The better the driving history and lower their risk, the more impact it should have.Those with a good driving record are likely to help make the most savings, but anyone who's a lower risk can help. By law insurers can't discriminate over gender, but age, driving experience and history can make a difference.

    • This is about trial and error not logic. Your mum may increase the cost, your brother may cut it, or vice versa. It's just a question of trying different quotes and seeing what happens.

    • Different insurers respond in different ways: One may cut your costs adding your uncle, another may increase it. Therefore a quick way to check is by varying quotes on comparison sites – it's easy to do, see our top comparison sites list below.

    • The second driver should be someone who would reasonably drive your car. So don't add Lewis Hamilton, unless you happen to be his brother (and even then racing drivers are likely a very high risk so I wouldn't bother) – but your mum, son, best mate or gran should be OK – as long as they would drive the car.

    • Never add someone as main driver if they're not. This is known in the industry as 'fronting' and is fraud. If you do it and are caught you can face a criminal conviction and your insurance will likely be invalid.

  • We first looked at this back in 2018, when we revealed 21 days ahead was the cheapest time to get car insurance quotes. We've now done this research for the third time, and it's revealed that the cheapest time to get  car insurance quotes is 23 days ahead of your renewal date (though any time between 19 and 25 days ahead doesn't change the price by much).

    To get to this 23 days, we analysed over 70 million quotes (from between February 2020 and February 2021) from the four biggest price comparison sites – Gocompare, Compare The Market, and MoneySupermarket.

    Our analysis showed a policy costs an average of £1,198 a year on renewal day, but 23 days earlier the average is just £694 a year – a MASSIVE £504 difference.

    In general, the closer to your renewal date you get quotes, the more of a risk you're deemed to be (we've heard that it can show insurers you're a bit disorganised). Yet, getting quotes too early, for example, 28+ days out can also push the average price up - likely as fewer insurers will provide quotes that far out.

    So, if you're already within the 19 to 25 day period, get quotes now as the price tends to steadily increase closer to the start date of the policy. If you're closer to your renewal date, every day helps, so get quotes ASAP.

    We've full info on how to bag the cheapest policy in this guide – see our comparison sites order below.

  • Whether or not you're a young driver, insurance premiums (the payments made to insurance companies) depend on three things:

    1. The insurer
    2. Level of cover
    3. Your risk level

    Car insurance rates are set by actuaries, whose job is to calculate risk. You can make big savings by showing an insurer you're not the typical high-risk young driver.

    Each insurer's price depends on the underwriters' assessment of your particular situation and the pricing model that dictates the type of customers the insurer wants to attract. See what affects your quote for more information. 

    • The less you drive, the cheaper your insurance can be. Where possible, try to reduce your mileage. This may sound trite, but actually the real key is incorporating the extra insurance cost when you make long journeys, not just the cost of petrol compared to taking the bus or train (also read our Cheap trains guide).

      Anecdotally, though many simply get a quote for 10,000 miles a year, MoneySavers have reported that 5,000 is the best figure to use – though we haven't tested this. If you drive your vehicle on business, always declare this rather than just including the business miles as personal, or the policy may be void.

    • PassPlus: This Driving Standards Agency course is aimed at helping drivers to become more confident on the road. There are six modules: town driving, all-weather driving, driving on rural roads, night driving, driving on dual carriage ways and driving on motorways, and takes at least six hours to complete.

      The course costs about from £150 - £250 as it varies depending on where you live and the instructor or driving school you choose. Some local councils in England and Scotland offer discounts of up to 40%, which are usually for under-25s, while in Wales it only costs £20. See for more details.

      Once you have the certificate some, although not many, insurers discount the price of your cover. Sadly it's become less and less recognised in the last few years, so the discounts aren't generally that high. There's a good chance you could get cheaper cover elsewhere.

  • Another quick win is tweaking your job description (legitimately of course). An illustrator is often cheaper than an artist, an editor than a journalist, a PA than a secretary.

    Have a play with our Car Insurance Job Picker tool and see if small changes to your job description could save you cash. Remember, never lie as this will be considered fraudulent. A good way to look at it is "would a reasonable person consider this a reasonable description of what I do for a living?". If not, best to err on the side of caution. 

    If it worked for you, share your success stories with our forum users.

    Thank you @MartinSLewis after rewording my job occupation on car insurance I have managed to save £400.

    I did this too thanks to @MartinSLewis from creative director to marketing manager = saved £300+ Crazy world isn't it?

    What should I put if I'm unemployed?

    If you don't have a job, you face a potential fivefold jump in insurance costs by declaring you're unemployed. The same hikes don't apply to homemakers (house wives/house husbands). If that's you, say so to avoid a hike in costs.

    However, only enter homemaker if you're genuinely not seeking work or receiving benefits which require you to seek work. Otherwise, it's fraud.

  • If you haven't got 'normal' circumstances, for example, you've made a claim in the past few years, have a modified car or expect to drive 100,000s of miles a year, tell your insurer. If you don't and then try to claim, even for an unrelated issue, your policy may be invalid.

    You also need to tell your insurer about any changes as this reduces potential problems in the event of a claim, even if it's just your address. Trying to get insurance after you've had a policy cancelled is very difficult, very expensive and will follow you for the rest of your life.

    A change in circumstances includes moving jobs, as insurers believe this can affect your risk. Scandalously, the unemployed often (though not always) pay higher rates for their car insurance – so tell your provider if you're out of work.

    With insurance, remember – the golden rule is:

    Tell them the truth, the whole truth and nothing but the truth.

    If you've read these tips and thought, "it's easy to lie about this", then of course, you're right. Yet lying on your insurance form is fraud. It can lead to your insurance being invalidated and, in the worst case, a criminal prosecution for driving without insurance.

  • Nothing better illustrates car insurers preying on loyal customers than Sarah Cooper's tweet. "My car insurance renewal is £1,200. New policy with same company is £690. How do they justify this?" They don't. They just do it.

    Insurers charge increasing amounts each year, knowing inertia will stop policyholders switching. If your renewal is coming up, jot it in your diary to remember it. Compare comparison sites and then call your insurer to see if they can match, or even beat, the best quote you found. If they can, you're quids in.

  • If you have more than one car in your immediate family or household, this could be for you. For some, discounts for adding multiple cars could save £100s, or even £1,000s in some cases, but for others it could actually be more expensive. 

    To help, our dedicated Multicar insurance guide explains when to get a multicar policy, how they work and how to get one - even if you have different start dates for each car.

  • Telematics is a policy which prices your premiums depending on how, when and where you drive. A device – known as a black box – installed in your car monitors your actions behind the wheel so the better your driving, the less you pay for cover. Sometimes this is done via an app on your phone.

    If you are confident that you can drive well you can save £100s back on your cover via a telematics policy. Be warned, however, that driving badly could also see your premiums increase, or even your policy cancelled.

  • It's worth thinking about going for a policy with a higher excess – the amount of any claim you need to pay yourself. A higher excess will result in lower premiums but make sure you can afford the premium in the event you need to claim.

    Many people find that claiming for less than £500 of damage both increases the future cost of insurance and can invalidate no-claims bonuses, meaning it's not always worth making a claim.

    So why pay extra for a lower excess? A few insurers will reduce premiums for a £500 excess, so try this when getting quotes. The downside of this is if you have a bigger claim you'll have to shell out more, so take this into account - as policies do usually come with a compulsory excess (which will be in addition to your voluntary excess).

    If the thought of a high excess worries you, an excess protection policy is available – this allows you to claim the excess sum back. But make sure the insurer's discount exceeds the cost of this excess policy to make it worthwhile.

    It is also worth noting that with this policy, you are not covered within the first 30 days of taking out the contract. You'll still need to pay the excess, and wait for reimbursement - no matter who is at fault.

What do I need to get a young driver insurance quote?

Once you know the basics from our top 10 tips for cutting costs, it's time to follow the steps below.

Warning: No matter how tempted you are to say someone else is the main driver, or to pretend you have no points, or to deliberately underestimate your mileage to get a cheaper premium – don't. You must be completely honest or it could invalidate your insurance and even lead to prosecution. 

Step 1: Get quotes from multiple comparison sites

Firstly, visit the comparison sites as these zip your details off to a number of insurers' and brokers' websites to find the cheapest quotes. As no single site captures the entire market and prices vary, combining a number of sites is the best way to make a saving. It's best to use all four, but if you don't have time, we've ranked them in order of the sites that most often return the cheapest quotes so you've the best chance of bagging the top deal.

Do note that comparison sites use a soft search of your credit file to return quotes, though this has no impact on your ability to get credit in future.

  • How do we pick the order?

    We analyse the prices of a large range of insurance quotes given by Compare The Market, and MoneySupermarket. We then take the following steps:

    1. We check how many times each comparison site returned the cheapest or within £5 of the cheapest quote.
    2. The comparison site giving the greatest number of cheapest quotes, or within £5 of the cheapest, is ranked first.
    3. We then analyse the comparison site ranked first with each of the two remaining comparison sites. The combination of the two that returns the greatest number of cheapest quotes will be ranked as first and second to try, to increase your chances of a cheap quote at speed.

    Here are the latest scores

    This month's results show that Compare The Market gives the cheapest quote 55% of the time – the most out of the three comparison sites. Get a quote from Compare The Market and MoneySupermarket and you'll increase your chances of getting a cheaper quote to 83%.

    To boost your chances of getting a cheap quote even further, get a quote from Compare The Market, MoneySupermarket and

    Follow this order if you're under 25. However, if you're aged 25+, do not have more than three penalty points on your licence, are claim/accident-free, and it's not a company car, see our Cheap car insurance guide).

Try comparison sites in this order

Site Official perk info & MSE's analysis
Try as many as you can, in this order...
Compare The Market*

Official perk info: Meerkat Movies and Meals. A year's 2for1 on cinema tickets and meals on selected days of the week.

MSE perk analysis: For those who'd use it, and go to the flicks and restaurants, this perk can be worth £100s. However, instead you could grab other perks as you can use  our trick to get Meerkat Movies and Meals for £1 for a year.

See our full Compare The Market perk analysis.


Official perk info: SuperSaveClub and Price promise

SuperSaveClub: Buy annual car insurance and you can join this club, which gives you a 12-month Free Days Out pass. Plus, you’ll get a gift card of up to £15 for each subsequent qualifying product purchase you make through MoneySupermarket. 

Price promise: If you buy car insurance, then find a cheaper like-for-like policy with the same insurer (either direct or via another comparison site), MoneySupermarket refunds the difference plus a £20 gift card.

MSE perk analysis: The Free Days Out pass gives you one adult entry to places across the UK, so used regularly and it could be worth £100s. The £15 gift card on subsequent qualifying products is a bonus, as long as the quote’s competitive.

You can use the price promise even if you’re not a member of the SuperSaveClub, though you’ll have to claim it.

See our full MoneySupermarket perk analysis.*
Official perk info: A Greggs hot drink per month and the choice of a... £20 Halfords voucher | £20 Sainsbury's voucher | £20 Just Eat voucher | Access to Paramount+ for three months.

MSE perk analysis: The highest value is Paramount+, just, at £20.97. Add 12 hot drinks, and the value increases to about £40.

See our full Confused perk analysis.
Then, to boost chances of finding a cheap quote further, try...
Quotezone* – another comparison site, and you get access to Rewards+ within 60 days after buying a policy. It includes discounted tickets at selected Cineworld and Odeon Cinemas.
Gocompare – a big comparison site which currently gives £250 'free' excess cover with every purchase.
Direct Line – an insurer, rather than a comparison, but you won't find its quotes on any comparisons, so it's worth trying in case it's cheaper for you.

Struggling to find (affordable) cover?

If you've had a string of claims or accidents, you have a medical condition that affects your driving, or you've four or more points on your licence, you may find it hard to get an affordable quote from a comparison site. Some may find it hard to get cover at all.

If no or few insurers are quoting on the sites above, or premiums are coming back too high, consider enlisting the help of a broker. Search the British Insurance Brokers' Association website to find someone who can help.

  • Always double-check the price

    Click through to the insurance provider's own website to double-check the quotes, as to speed up searches some comparison sites make a few assumptions (see what to check).

  • Examine the policy's coverage

    Check whether it's suitable . If you want "free car hire" while your car is being fixed, is it included?

    Plus while you're there, it's worth playing with the policy details to see if you can finesse the price down. Look at the excess, and whether adding drivers cuts the cost.

Keep on top of your car insurance

Mobile phone showing the MSE App.

Wanna know when YOUR cheapest time to get car insurance is? The MSE App has a new tool called Bill Buster – give us a few details about your car insurance policy and we'll track it, then alert you when it's ending so you know when to start getting quotes to save.

Try it in the MSE App – available in Apple's App Store or Google's Play Store

Step 2: Try a specialist telematics policy

Telematics (also referred to as "black/smart box", "pay-as-you-drive" and "usage based") is a type of motor insurance policy which prices your premiums depending on how you drive. 

This is where you have a device fitted to your car (or download an app to your phone) that monitors your driving - when/where/how you drive, your braking, speed, cornering and how many miles you drive. Of course, the flipside is that high risk driving behaviour could cost you more - or even see your policy cancelled. So the better you drive, the less you pay.

These types of policies are now commonly available via the comparison sites in step one, and if you're a careful driver who doesn't cover many miles and drives during off-peak hours, you could see a reduction in the premium you pay.

How do insurers judge your driving?

It's not just a case of keeping your hands at ten and two and shifting smoothly up the gears. An insurer will take the following into account when determining if it will reward you for responsible driving.

  • The time of day or night you drive (10pm to 5am may cost more)
  • Your speed (stick to the limit)
  • Gentle braking reactions (hard and sharp stopping is not good)
  • Gentle acceleration and cornering is good (don't treat your local roads like Silverstone)

While your insurer will be following your driving closely, there are relatively few restrictions on when and where you drive.

Quick question

  • Do I have to pay for a black box?

    Once you've signed up for a policy, you'll need to arrange a date for a black box to be fitted to your car (unless it's an app-based policy).

    You don't typically have to pay an upfront cost for the box but the price of it will be incorporated within the premium. Some insurers will impose a fee if you miss a fitting appointment, need to move the box to another car or want it removed.

    And if you start tampering with it – thinking you can move it or trick it, and it breaks, expect a hefty bill for a replacement box.

Step 3: See if you can get cashback on top of the cheapest quote

If you use cashback sites, you'll know that if you get your car insurance via them they will get a 'lead fee' for sending you on to the insurer. Once it gets paid the fee by the insurer, the cashback will either be paid directly to you, though some are now starting to only pay the cashback to a charity.

This is likely to be displayed – alongside the insurance provider – if payment will be to a charity, but do check if you are unsure.

This can beat going to the comparison sites above, but do check your quote through a cashback site isn't more expensive – and it's best to think of the cashback as a bonus, rather than 100% guaranteed as sometimes the deal isn't tracked or the cash paid out. These are the two routes to try...

  • Route 1: Use cashback sites' own comparisons. There's a version of's comparison when you use cashback site Topcashback*, or go via Quidco* and it will be a MoneySupermarket version. Should you use either of these cashback sites, you'll get £45 cashback if you buy a policy through either of them, though you don't get the standard Confused or MoneySupermarket perks as these are a rebranded version of its comparison.

    Yet as we say above, do keep an eye on the quotes you get, as you may not get exactly the same prices as you would from Confused's (or MoneySupermarket's) comparison. The easiest way to do it is to look at the quotes you get, then take off £45 from Quidco's or Topcashback's cheapest, and see which works out cheapest for you.

  • Route 2: Find your cheapest insurer then go via a cashback site. Once you know your cheapest insurer, check what cashback you, or the charity, will get going to it direct via  Quidco* and Topcashback*

    But be careful not to let the cashback tail wag the dog. Choose the right insurer first, then look for cashback. Don't look for the biggest cashback then choose the insurer.

    Again, make sure you check the price you're getting through this route is the same as the prices you found from the comparisons you've already done. If it's more expensive, see if the cashback offsets the rise. If not, go with the quotes you got above.

Our Top cashback sites guide has full information on how these sites work.

Step 4: Once you've found the cheapest quote, try to haggle a bigger discount with your existing insurer

Haggling is not a must – especially if you want to try a new provider – but if you're looking to renew with your current insurer it's well worth contacting it to negotiate.

Once you've followed the steps above and got the overall cheapest price, give your insurer a call or use its online chat to see if will beat or match it. Usually it's as simple as asking, but if you're not getting any luck, see our Car and home insurance haggling guide for top tips.

Been with my insurer two years, just turned 22. Last year's price £690, price at renewal £575... while Tesco quoted £425.

Rang my insurer up, explained how I wanted to stay as I love their service. He quoted me a new price of £423, saving £152 and no changes. So happy that I rang. Thanks for the best tips everrr!

Ava, by email

For more haggling tips, read the full Car and Home Insurance Haggling guide.

Have you used this guide's techniques to save on your car insurance? If so, please feed back on the price you found in the Young Drivers' Insurance Savings forum discussion.

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What extras can I get with car insurance?

Many policies will have optional extras, or add-ons, that you can choose to include, which can include the following:
  • Courtesy car. Check what sort of car you might get, in which scenarios, and how long you could have it for. There may then be an optional upgrade to extend this cover if it's unlikely to suit.

  • Breakdown policy. Check the cover carefully as these are often basic policies, so breakdowns at home or onward travel to your destination may not be covered. Upgrades are often possible, but if you're paying more for the insurance because it has breakdown cover, always compare it against a cheap standalone car breakdown policy.

  • Protected no-claims discount. If you have a car insurance policy for a full year and don't make a claim, you'll earn a discount on the following year. This can be valuable so you can choose to protect it, which means you won't lose it. See what is no-claim bonus protection? for full help.

You don't have to have a policy that has any of these extras, but if they're important to you (eg you would need a courtesy car to get to work if you couldn't drive your own) make sure any policy you buy has this cover. 

How to complain about your insurance provider

The insurance industry doesn't have the best customer-service reputation and while a provider may be good for some, it can be hell for others. 

Common problems include claims either not being paid out on time, not at all, or even an undervaluation of your car (by the insurer) as a result of a total loss claim. Other reasons to complain can also be unfair charges for changing your address, drivers, car, or exclusions being hidden in small print. Also, It's always worth trying to call your provider first, but, if not, then…

Young drivers' insurance Q & A

  • Why is car insurance so expensive for young drivers?

    Unfortunately there are several reasons for this. Young drivers are less experienced than older road users, bringing them into a higher risk category with insurers. Less experienced drivers are more likely to have more accidents, and therefore put in more claims to their insurers – so insurance companies make their premiums more expensive to compensate.

    Yet by driving carefully you can help offset this and lower your premium – see above for more. Our car insurance for new drivers guide will fill in the gaps.

  • Should I take a monthly payment plan?

    Beware 'pay monthly' options – usually the insurer just loans you the annual cost and then charges interest on top at hideous rates. As the average cost for a 20-24-year-old is over £900, paying by installments can easily add in excess of another £200 to your premium.

    So either pay in full, or if you can't afford it, try to borrow the money elsewhere more cheaply (ideally on a 0% credit card for spending, ensuring your repayments are big enough to clear it within a year).

    If paying by credit card, check if the insurer or provider charge a fee for doing so – though the fee is usually less the monthly installments interest charge.

  • I'm not driving my car for a bit, does it need to be insured?

    Yes – cars must be insured unless declared off-road. The Continuous Insurance Enforcement scheme means all cars must be insured – even if no one drives them. The aim's to crack down on two million uninsured drivers by matching up the database of cars and insured drivers.

    The only way out is to apply for a SORN (Statutory Off Road Notification) declaring your car will never be driven. Ensure you search for the new cheapest in advance of renewal, or you'll end up just auto-renewing to stop the fine.

  • Am I covered to drive others' cars on my insurance?

    If your insurance allows it, driving someone else's car instead of yours can be a way to cut mileage. Check your policy details carefully to find out if you can.

    If you have fully comprehensive insurance then often, although not always, it includes what's called "driving other cars" cover. This provides you with third party cover whilst reducing your mileage and therefore the cost of your own policy.

  • Would it be cheaper for me to just get a motorbike instead?

    Generally, insurance is a lot cheaper for a moped or motorbike than for a car. Plus, some insurers may put any no claims bonus from bike insurance on your car insurance too if you later get your car insured with them. Yet do take safety into account as a new driver – if you're in an accident, you're better-protected if you're in a car. See the Bike Insurance guide for more.

  • Are there any ways to get a no-claims bonus faster?

    Some schemes do offer an accelerated no-claims bonus. MSE's forumites have suggested if you've previously been insured as an additional driver on, for example, your parents' policy, call your insurer and ask if they'd be willing to take this into account for a no-claims bonus. Some insurers do this, including Direct Line.

    See the Great Young Drivers Insurance Savings Hunt  discussion for more tips and tricks.

  • Must I inform my insurer if I have an accident but don't claim?

    If you have an accident, and damage someone else's car, but decide to cover the costs yourself, then strictly speaking, you should still tell your insurer about it.

    Many don't, thinking it will increase premiums, yet a problem may arise if you have a second accident and it is found to be related to work undertaken for the first. If this happens it would most likely result in the claim not being paid, rather than the insurance being cancelled or being reported for fraud. But it could still end up costing you £1,000s.

  • What happens if my insurer goes bust?

    Insurance providers regulated in the UK are covered by the same Government-backed Financial Services Compensation Scheme (FSCS) as banks, so if they go into default, you're protected.

    A number of insurers – particularly those who offer telematics pay-when-you-drive cover – are based in Gibraltar. However, a special FCA rule says these policies have the same protection as those from UK-based insurers. Specifically: "The UK requires all EEA (European) insurers... to participate in the FSCS in the same way as all insurers that are directly authorised by the FCA."

    In the unlikely event a regulated insurer goes bust, the FSCS will try to find another provider to take over or issue a substitute policy. However, if you've ongoing claims, or need to claim before a new insurer is found, the FSCS should ensure you're covered. For more see the insurance section of the Savings Safety guide.

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