It can be confusing trying to figure out which type of car insurance policy you need, therefore in this guide, we explore each type of car insurance policy in depth to help you make an informed decision.
What Levels Of Car Insurance Are Available?
There are three types of car insurance cover available - third party only; third party, fire and theft; and comprehensive car insurance.
Third party Only (Also Known As TPO)
Third party only cover is the minimum legal level of insurance you need in the UK to cover your car. This insurance policy covers the cost of any damage or injury caused to another vehicle, person or their property if you are liable for it. However, this does not cover or provide any financial assistance for any damage caused to your own car (such as repair costs) or any injury caused to you in an accident. This also doesn’t cover your car in case of fire damage, theft, or attempted theft.
Third party, fire and theft
Third party, fire and theft offers the same level of cover as third party insurance. In addition to that, you’ll also be covered if your car is damaged through fire, if it gets stolen, or if theft is attempted.
Comprehensive insurance is the top level of car insurance cover you can get. It provides cover for any damage or loss to your own vehicle, as well as third party, fire and theft. With comprehensive insurance, you are eligible to make a claim whether the accident was your fault or not. For example, if damage is caused by a third party when fault cannot be determined, you can still make a claim.
What Is The Difference Between Third Party And Fully Comprehensive Car Insurance?
Fully comprehensive car insurance covers all damage and injury to anybody involved in an accident. This can normally cover a wider range of ‘damages’, such as damages, injuries, and loss to your passengers, your vehicle, and other property.
Third party car insurance only covers the costs of any damage or injury you cause to anybody else.
Ultimately, the main difference is the kind of coverage each policy type offers. A third party insurance policy is more restrictive as it only covers you against third party damages and losses, while comprehensive car insurance will cover your own damages as well.
When Is A Third-Party Policy A Good Option?
Third party car insurance is often less expensive than comprehensive car insurance because you are not getting as much cover. People sometimes think it is worth opting for a third party policy due to cost-saving. However, the price difference isn’t always significant, so don’t assume that the lower premium justifies the drop in your level of cover.
That said, third party car insurance may be a suitable option for you if your car is worth very little, as your premium will often be more affordable and the cost to fix the car after an accident may be the same as buying a new vehicle altogether.
Why Have Fully Comprehensive Car Insurance?
Comprehensive cover offers the highest level of protection, giving you peace of mind that you are protected financially if you do get into an accident.
If you are unsure about what type of cover you need, take a look at our guide to what comprehensive cover includes.
Is Comprehensive Insurance More Expensive Than Other Policy Types?
Many assume that a comprehensive policy is always more expensive than third party only cover, or third-party, fire and theft - but this is not always the case. A lot of high-risk drivers tend to go for third-party cover as a way of lowering their insurance costs, which leads to a higher number of claims being made and results in the cost of TPO cover increasing. Therefore, you may actually find that comprehensive insurance actually works out cheaper than a third-party policy. This means that you may not need to compromise on your cover just to save a few pounds.
How Can You Save Money On Your Car Insurance?
Car insurance often isn’t cheap, but opting for a lower level of cover just to save money may not be the wisest choice. Having minimal cover may mean that you could end up paying out more in the long run. For example, if you opt for third-party only cover but are involved in an accident that is your fault or where fault cannot be determined, you could end up paying more to cover the costs than you would have paid for comprehensive cover that would have provided you with more protection. It’s important to take out the right level of cover for your circumstances and to go with a policy that will bring you peace of mind.
If you’re looking to save money, some alternative ways to decrease your premium price include:
- Increasing your voluntary excess
- Fitting your vehicle with an alarm
- Keeping your vehicle in a garage overnight
- Considering telematic or black box insurance
Ultimately, if you are looking for the right cover at the right price, the best advice we can give is that you shop around, and Be Wiser is a great place to do that.