Compound car insurance – your expert guide
There are many different types of car insurance available to drives in the UK – and one for impounded vehicles is called compound insurance.
Penalties for breaking the law or rules of the roads can lead to serious problems.
In this guide, we show you what you need to know about retrieving your vehicle and how compound insurance works.
What is compound insurance?
Compound insurance, also called impound insurance, is a car insurance policy designed for situations where a car has been impounded.
Although there are many possible variations of this, compound car insurance usually provides coverage for up to 30 days.
This is because if your car has been seized, you must prove it’s insured for at least a month to recover it.
Drivers must remember that they can take out an annual car insurance policy if their vehicle is impounded, but they will need to check that the insurer will allow it to be released from the impound.
It is important to note that if your existing car insurance policy doesn’t cover impounded vehicles, then you may need to take out compound insurance.
In many cases, this specialised coverage starts immediately, enabling you to reclaim your vehicle.
Why do you need compound car insurance?
The main reason for taking out compound car insurance is to release an impounded car. This is because you must present proof of insurance that’s valid for a minimum of 30 days.
However, this policy must explicitly allow for the release of impounded vehicles.
- What is comprehensive car insurance?
- Car insurance groups listed and explained
- Motor Insurance Database – what is it?
Why are cars impounded in the UK?
Vehicles can be impounded by the police, local authorities, or the DVLA for several reasons that drivers should be aware of.
Here are some of the main reasons why cars are impounded:
- Driving without insurance
- Driving without a license
- Driving dangerously
- Illegal parking
- Illegally blocking the roads
- Abandoned
- Not having a valid MOT
According to the latest DVLA data, in 2023, over 214,000 vehicles were impounded in the UK.
How to reclaim an impounded vehicle?
The first step after receiving the letter that the vehicle is impounded is to locate the vehicle.
If you didn’t receive a notice letter, call 101 to find out where your car has been taken. You will need to have all the relevant documents for owning a vehicle.
The notice letter will outline the steps and timeframe for retrieving your car, as well as the process you will need to carry out.
Each seizure may vary depending on the reason for action taken by the police.
The next step is to go to the designated car pound (or police station) with the seizure notice or penalty ticket, a valid UK driving licence, another form of ID, proof of ownership, V5C log book, a valid MOT certificate, and proof of insurance that covers impounded vehicles.
Finally, the offender will need to pay the release fee and any daily storage charges. Failure to collect your car within the notice period (normally 7 days), could result in your car being sold or scrapped.
Cheaper than AA Price Promise^
• Roadside cover from £5.29 a month*
• We get to most breakdowns in 60 mins or less
• Our patrols fix 4/5 breakdowns on the spot
*At least 10% of new customers pay this for single-vehicle Roadside (Basic). ^Find the same cover cheaper with the AA within 7 days & we’ll beat it by 20%. †T&Cs apply.
You might also like
Driving without insurance – here are the consequences
There’s no excuse for driving without valid car insurance – because it’s illegal. Here’s our guide to the law and punishments for driving without insurance.
Is my car insured? How to check your vehicle's insurance
Here, we outline how you can check to see if your car insured, when it expires, and the risks of driving without it. Get up to date with RAC Drive today.
Lease car insurance – is cover always included?
The way people are buying cars in the UK is changing: personal contract leasing is becoming increasingly popular - here's how insurance works.
Modified car insurance guide
There are many types of insurance available to drivers – and in this guide we cover modified car insurance. Read our RAC Drive guide on insurance.
Motor Insurance Database - what is it?
AskMid, or the Motor Insurance Database, is a free online service for drivers in the UK that provides data about the status of their vehicle insurance.
Personal accident cover and car insurance guide
Having the right insurance for you is important as a driver in the UK – and including personal accident cover could help you in case the worst should happen.
What is a Cat A, Cat B, Cat S or Cat N insurance write-off?
What is an insurance 'write-off'? How do Cat A, Cat B, Cat S and Cat N write-off categories work? Find out with the RAC's in-depth guide.
What is GAP insurance?
Here, we explain what GAP insurance is and try to answer some of the most frequently answered questions about the special type of cover.
What is third party car insurance?
This guide breaks down third party car insurance, what it covers, whether it'll save you money, as well as all the pros and cons.
What is comprehensive car insurance?
Fully comprehensive car insurance covers damage to yourself, your car as well as compensating a third party if you are involved in an accident.
Popular in Advice & Guides
1
Are headlights too bright? Everything you need to know about headlight glare
2
Lost driving licence – how to get a replacement
3
Car dashboard symbols and meanings – warning lights guide
4
What to do if your car breaks down
5
A complete guide to motorbike tax
6
How to check MOT history
7
MOT checklist and comprehensive guide
8
Cheapest cars to insure for new drivers 2025 - Top 10
9
Euro 7 emissions standard: what is it and when does it come into effect?
10