The History of UK Car Insurance


Have you ever wondered about the history of UK car insurance? Do you know how long car insurance has been around or why it became mandatory to have? Perhaps you’ve wondered why or when a certain type of motor insurance scheme came about. For instance, you may be curious as to why or when temporary car insurance (more UK info here) came about.

Brief history

Motor insurance was first established in Britain in 1890. From 1890 to 1920, car insurance was voluntary. The policies were similar to standard fire, theft, and life insurance covers. Due to the standards used, insurance companies set their rates with focus on the weight, size, and value of the automobile. However, by 1930, the amount of traffic on the highways and the number of fatalities led to focus on uninsured motorists. So road use safety became the focus of the laws and insurance companies.

Changes made

The Road Traffic Act of 1930 replaced several previous Acts. It removed and added some restrictions on public road usage. Among the new additions was the requirement for all drivers to carry third-party liability covers. The Road Traffic Act of 1930 also introduced the driving offences of dangerous, reckless, and careless driving. It prohibited driving whilst unfit and under the influence of alcohol or drugs. The Act of 1930 also abolished all speed limits for motor cars, set motor vehicle classifications and introduced the first driving tests.

Also in 1930, most of the members of the Accident Offices Association signed what is known as the “Car Insurance Tariff” agreement. This agreement established set insurance standards, set minimum rates for each car classification, set discount rates, and set limits on commissions for brokers and agents. The Tariff agreement was dissolved in 1968, after a gradual breakaway due to the market division caused by the restraints that had been implemented. The group of insurers that didn’t sign the agreement became known as Non-Tariff companies. Edward Lloyds developed the concept of using specialised schemes so his Non-Tariff company could compete in the market controlled by the Tariff companies.

More changes made

Car insurance basically stayed the same from the 1940s to 1980s. Motor covers were usually purchased from insurance brokers in face-to-face meetings. Then computers came along and improved the brokers’ services. Many took advantage of the Internet when it became available for public use. Now people can find a broker or specialist merely by going online.

It’s also fairly easy to purchase most types of motor covers online, including temporary car insurance. temporary car insurance is a recent addition to the various motor liability insurance schemes. It came about as the result of the poor economic conditions of the past few years. In early 2011, a new law established requirements for having motor liability insurance even when a vehicle is not being driven on public roads. Many people find it feasible to use a SORN when the vehicle’s parked, and a temporary car insurance policy for when the vehicle’s being driven


Copyright 2010 Gottfried Goldmann