If you're wondering whether you need car insurance, it is best to begin with a discussion of what it is and what it does.

In its basic form, car insurance provides protection against financial losses incurred as a result of an accident, theft or damage to your vehicle. You and the insurer both have certain rights and obligations in the event of an accident, and these are spelled out in your contract, or policy.

Car insurance takes three forms to meet the needs of individual drivers.

The minimum legal level of insurance is called Third Party or liability cover. This type covers your liabilities with respect to third parties such as people other than yourself who are injured in an accident, or other people's property damaged in an accident deemed your fault.

The second is Third Party, Fire and Theft and covers the situations mentioned above and adds cover for theft and damage to your vehicle caused by theft and fire.

Comprehensive Car Insurance adds to the above with cover for accidental damage to your vehicle, vandalism, personal accident, limited medical expenses, damage or loss of personal property carried in your vehicle, and replacement of your vehicle in the first year.

In the UK, as in most countries, car insurance is required by the law, so, in answer to your original question, if you drive a car, you need car insurance. In addition, it is a serious crime to drive your car or allow others to drive your car without insurance. In fact, doing so could earn you a stay in prison, especially if you are involved in an accident.

Now, with a basic knowledge of insurance and its coverage types, you can see why it is compulsory for all drivers. Every time you get behind the wheel, you take the risk of damage to your car, to yourself and to other's property in your own hands.

New or young drivers will find their insurance premiums higher than those of experienced drivers for obvious reasons. But it is possible to bring your premiums down.

First, take and pass a drivers' safety course, or the Pass Plus Driving Exam. Designed for new and young card drivers, these intensive training courses show young drivers how to be better drivers. If you pass, you can receive up to 35% off your car insurance premiums.

Another option is to pay a higher excess or deductible. This represents your portion of the financial responsibility when you have a claim. Insurers have minimum excess amounts, but if you volunteer a higher amount, you may save on your premiums.

Research several companies, their cover and their premiums. It is possible to see a substantial savings on your premiums just by comparing the companies against each other - even for young drivers. It is easiest to get information and quotes online. If you decide to buy your policy online, you may receive a discount for that as well.

Also, consider paying your premium at once rather than quarterly or monthly. Most car insurance companies charge interest, some up to 30%, when you pay in installments.