Car insurance in the UK for new residents

Whether you’re planning a road trip to explore the great British outdoors, or just doing the daily school run, it’s essential to have the right car insurance before you get behind the wheel.

Do I need car insurance in the UK?

In short, yes. If you’re driving in the UK, then you need car insurance - it’s a legal requirement.

If you’re caught driving without a valid car insurance policy, you could have to pay a £300 fine and get six penalty points on your licence. If the case goes to court, you might have to pay an even bigger fine, and you could be disqualified from driving.

Types of car insurance in the UK

In the UK, you can get three different levels of car insurance coverage: third-party, third-party fire and theft, and comprehensive.

• Third-party: the minimum level of insurance you must have. It covers damage to other people’s vehicles and property, but won’t cover any damage to your car.
• Third-party, fire & theft: this covers damage to other people’s vehicles and property, plus any costs related to fire damage or the theft of your car.
• Comprehensive: the highest level of insurance cover. It includes accidental damage to your car, as well as any injuries you might sustain in an accident.

Comprehensive cover offers the highest level of protection, and it can often be the cheapest option for many drivers.

When choosing your level of insurance cover, think about how much protection you’d like, and how much you can afford to pay. Prices vary based on things like your age and driving experience, the type of car you drive, where you park it and where you live, so it’s important to shop around and compare quotes before you buy.

Challenges of getting car insurance as a newcomer to the UK

If you’ve just moved to the UK, you may find it a bit tricky to get car insurance for the first time. This is partly because insurers need to know how much of a risk you might be, so they can decide whether to offer you insurance, and at what price.

When you’re new to the UK, you won’t have a driving history here, or a claims record - so insurers won’t be able to see your track record of driving. They won’t know if you’ve been involved in any road accidents, or if you’ve claimed on your insurance in the past - this makes it hard for them to gauge whether they should insure you or not.

This is one reason why insurance premiums tend to be higher for drivers with licences from outside the UK. Some insurance companies don’t offer insurance to drivers from other countries. As a newcomer to the UK, your car insurance options might be more limited, but shopping around and comparing quotes will help you find the right option for you. 

How to get car insurance as a new UK resident

To get car insurance in the UK, you’ll need to provide certain documents to prove your identity, residency, and driving history. Here’s what you’ll need:

• Proof of address: a recent utility bill, bank statement, or council tax bill
• Proof of identity: your passport, or biometric residence permit (BRP)
• Vehicle documents: the V5C logbook if you own the car, and the MOT certificate if the car is over three years old
• Your driving licence: either a UK full or provisional licence, or a foreign licence

Some insurers accept international driving licences, but the premiums might be more expensive.

When you’re looking for car insurance, the best place to start is on a price comparison website. You’ll be asked for information about yourself, your car and your driving history. Then, you can see prices from different insurance companies, and you can usually filter these according to how much cover you want. It’s a good idea to get quotes from a few different price comparison sites, to help you find the best deal for you.

How to reduce the cost of car insurance as a newcomer

There are a few tips and tricks you can try to help bring down the cost of your car insurance.

• Get a UK licence: car insurance will usually be cheaper for drivers with a UK licence rather than an international one. You might be able to exchange your licence for a UK licence, depending on where you originally passed your driving test.
• Use your no-claims discount: if you’ve built up a few years of no-claims discount in your home country, then it makes sense to look for an insurer that will take this into account when giving you a quote. Not all insurance companies will accept a no-claims discount from outside the UK, so shop around to find one that will.
• Choose your car wisely: insurers take into account the value of your car when pricing your insurance policy. High-end or luxury cars are more attractive to thieves, and can be more expensive to repair, so the insurance tends to be higher for them. On the other hand, more commonplace models that can be repaired more cheaply tend to cost less to insure.
• Increase your excess: your insurance policy will include a voluntary excess - this is the amount you agree to pay towards any insurance claim. The higher this is, the lower your insurance premium is likely to be. Just make sure you can afford to pay it if the worst happens and you have to make a claim.
• Pay annually: your car insurance policy will last for one year, and you have the option to pay for it in one lump sum, or in monthly instalments. The one-off annual payment is a bigger sum to pay upfront, but it works out cheaper overall because you’ll be charged interest if you go for monthly payments.

What happens if you switch to a UK driving licence?

If you’re planning to stay in the UK for longer than a year, it might be a good idea to exchange your driving licence for a UK licence. If your licence is from a country outside the EU, you’ll have to convert it to a UK one after 12 months anyway. 
If you have a UK driving licence, then your car insurance premiums will usually be cheaper. Plus, you can use a UK licence as proof of identity and proof of address.

If you already have a car insurance policy, and you exchange your licence for a UK one, you’ll need to let the insurance company know so they can update the details on your policy. It’s important to do this, because if your policy includes information that’s not correct, then it won’t be valid, and the insurer might not pay out if you were to make a claim. To update your licence details, you’ll need to contact your insurance company.

Find out more about exchanging a foreign licence on the government website.

But, if you’re in the UK for less than 12 months, you can get temporary car insurance with an EU driving licence.