No, most standard car/van insurance policies do not cover a seized vehicle that is in the compound. This is because a person who has committed an offence serious enough to have their car seized is deemed to be too high risk for most insurers. If your vehicle is impounded, report it to your insurer first to check if it is covered. If it isn’t then you should consider contacting BCD to obtain a policy to enable you to get your vehicle back. The compound staff will simply refuse to release the car if you only have a standard policy.
