It's not clear why your car was impounded. (You've headed your question 'car insurance' but that doesn't normally have anything to do with a car being impounded. It's usually a problem with parking or road fund tax).
For an example of impoundment due to a parking offence, I'll refer to Camden council's policy. To get your car released from their pound costs �150 plus the parking fine. If you don't collect before midnight on the day after it was impounded, they'll charge an extra �25 per day:
http://www.camden.gov.uk/ccm/content/transport -and-streets/parking/clamps-%26-removals/clamp s-and-removals.en?page=4
If your vehicle has been impounded for having no tax disk, it will cost you �160 + �15 per day to get it back. It won't be released unless you produce a valid tax disk. If you can't do this, you have to pay a surety of �120. (You get this back if you produce a valid tax disk within 14 days, otherwise you lose your money).
Getting your car released from the pound doesn't prevent the authorities from prosecuting you for having it on the road without tax. (The maximum fine is �1000). You could also have to pay the tax for any period between the expiry of the last tax disk and the start of the validity of the new one.
Unclaimed vehicles which are of 'no economic value' are crushed after 7 days. Other vehicles are disposed of, by sale at auction, after 14 days.
http://direct.gov.uk/Motoring/OwningAVehicle/U ntaxedVehicle/UntaxedVehicleArticles/fs/en?CON TENT_ID=4022072&chk=JCu4Kk
Chris