Home Finance Insurance Insurance in the UK
Last update on November 15, 2019

Find out which types of insurance in the UK are mandatory, and what extra coverage you’ll need to protect your lifestyle and family, including accident, home, and life insurance in the UK.

The insurance industry in the UK is huge, to the point that a number of comparison websites exist where consumers can compare each insurance providers. The insurance system works similarly across most areas of cover in the UK, with monthly or annual premiums paid by customers, followed by an excess fee when they make a claim.

Here, we take a look at the importance of each type of insurance and how you can ensure you and your family are covered.

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Which insurances are legally required in the UK?

  • Car insurance: All cars used on the road or in public places must be insured, or declared ‘off the road’ if they’re not being used.
  • Health insurance: UK residents benefit from free healthcare under the National Health System (NHS), which is generally considered one of the best systems of its kind. Some people also choose to take out further health insurance, either through their place of work or a private healthcare scheme.
  • Dental insurance: Dental care is available on the NHS but you’ll still need to pay for it. It’s possible to take out dental insurance plans to ease the burden of expensive dental work.
  • Home insurance: Buildings insurance is usually required as part of your mortgage offer, and if you’re a landlord and you don’t have it, you’re breaking the law. While contents insurance isn’t required by law, it can be a sound investment to protect you against the unexpected.
  • Unemployment and life insurance:  Life insurance is common in the UK, though not required by law. Unemployment insurance does exist but is relatively uncommon.
  • Travel insurance:  You can take out travel insurance on a single trip, multi-trip or annual basis, and some paid-for ‘packaged’ bank accounts include travel insurance as a benefit.

Car insurance in the UK

Car insurance is compulsory in the UK, and it’s big business too, with dozens of companies offering deals that range significantly in price. With this in mind, you should always shop around for car insurance both when applying and when your renewal date comes up.

There are three types of insurance cover in the UK:

  • Third party: The minimum level of cover allowed by law. This type of policy doesn’t cover your costs if you cause an accident but does cover compensation for any other parties involved.
  • A third party, fire and theft: This type of policy also includes cover if your vehicle is stolen or damaged by fire.
  • Comprehensive: This type of cover varies between companies, but always includes cover if your vehicle is damaged in an accident. Some companies also offer courtesy cars and round the clock roadside assistance, including towing if your car breaks down.
Insurance UK: Car

If you have a car but aren’t using it, you should apply for a SORN (Statutory Off Road Notice), or you could face penalties, wheel-clamping or even prosecution through the courts.

Premiums for car insurance are payable either monthly or yearly (which is sometimes cheaper overall). Insurance policies usually come with an excess fee. For example, if your excess is £100, you’ll need to pay this when you make a claim. The UK also has a culture of offering ‘no-claims’ discounts, which allow people who haven’t claimed on their insurance in a number of years to obtain a substantial discount.

Health insurance in the UK

The UK’s National Health Service (NHS) offers medical treatment to all residents, covering everything from doctor’s appointments to emergency surgery.

Resources can be tight, however, and waiting lists are often long. With this in mind, many people take out private health insurance schemes, which generally offer quicker access to specialists, better facilities and shorter waiting times.

Private healthcare schemes come in all shapes and sizes, and how much they cost depend largely on your circumstances. Usually, you’ll pay a monthly premium for your health insurance, followed by an excess fee when you need to use your cover. Some workplaces include private healthcare in their benefits packages. There are many large companies which provide health insurance plans in the UK, including expat-friendly international firms such as:

Dental insurance in the UK

Free dental care is available for children aged under 18 (or under 19 if in full-time education), pregnant people or those who have had a baby in the last 12 months.

Dental care is available on the NHS, but unlike with healthcare, you’ll need to pay. NHS dental care in the UK is charged at flat rates on a ‘band’ basis, as follows:

  • Band one (£19.70): Dental examinations, scale and polish if required
  • Band two (£53.90): Also covers fillings, root canal work and removal of teeth
  • Band three (£233.70): Also covers crowns, dentures, bridges and lab work
  • Emergency treatment (£19.70): Covers emergency care such as pain relief of temporary fillings
Insurance UK: Dental

Rather than using the NHS service, some people choose a private dental plan instead. Dental plans aren’t usually included in private healthcare policies but can be taken out either by your dentist or an insurance company.  The primary reason for taking out dental insurance is to avoid being stung by huge bills should you need significant work done.

Some dentists deal with both NHS patients and private ones, so it’s possible you could end up with the same dentist if you move to a private plan.

Home insurance in the UK

Buildings insurance isn’t legally required for homeowners, but it’s often a condition of a mortgage offer, so you’ll need to get it when you buy a house.

Buildings insurance covers any damage to the structure of your home and any permanent fixtures and fittings. Your policy will usually cover the cost of rebuilding or repairing your home, although general wear and tear aren’t covered.

If you own a flat, the building may be insured by the landlord and covered as part of your service charge.

Buildings insurance isn’t usually prohibitively expensive (it might cost you around a couple of hundred pounds each year), but you will often need to pay an excess, as with other insurance products.

Contents, computers and jewellery: Insurance for your belongings

Contents insurance isn’t required by law, but it’s worth thinking about getting it anyway to protect your belongings in the event of an emergency.

Your belongings will be covered against fire, theft and flooding, and you’ll usually need to pay extra if you want accidental damage cover or personal possessions cover – which insures items you take outside of your property.

Home insurance UK

You can compare contents insurance providers online, and the cost of your policy will primarily be based on the value of the items you’re insuring.

Life insurance, unemployment and injury insurance in the UK

  • Life insurance policies usually pay out a lump sum on death (or in some cases serious injury). You can take out life insurance through private insurance companies (by paying a monthly premium based on the level of cover you require) or you may have life insurance included in your workplace benefits package or as part of a private health insurance scheme.
  • Unemployment insurance is relatively uncommon in the UK, although some people take out income protection insurance (also known as permanent health insurance). Income protection plans pay out a percentage of your earnings if you’re unable to work due to injury or illness. 

Insurance in the UK: Travel

Travel insurance is widely available in the UK, with dozens of providers offering packages for single, multi and annual trips abroad. While you should always take out travel insurance when leaving the UK, you should be covered for emergency medical cover in many European countries if you have a European Health Insurance Card (EHIC).

If you have a packaged bank account (which you’ll usually pay for on a monthly basis), you’ll often have basic travel insurance included as part of your account.

Most travel insurance providers offer a variety of different policies, with economy options being cheaper but having higher excess costs, and more expensive options including greater cover for transport issues such as loss of baggage and flight delays.