The minimum level of cover you need to legally be able to drive on the roads is called ‘Third Party’. It used to be the cheapest type of insurance but now bizarrely fully comprehensive policies can often be cheaper. Never assume one costs less than the other; quote both.
Third Party covers you for any damage you cause to another person’s vehicle and protection for any passengers in your car.
Therefore, if you are in an accident and it is your fault, you will have to pay for any repairs to your own car yourself, as your insurance won’t cover it. It’s more expensive because it’s assumed you care less about your car and are therefore more likely to have an accident.
It’s generally the most suitable for those…
- With cars worth less than £1000
- Aged under 25
- Without a no-claims bonus
- Or living in a high risk area
Third Party Fire and Theft
Third party fire and theft has the same level of cover as third party insurance. However, self evidently, it also has the additional cover of assistance if your car is stolen or is set on fire.
This is the widest level of cover but can be the cheapest. The big advantage is if you have an accident and it was your fault you will be able to claim the cost of repairing your own car as well as those of the other drivers.
The cover also includes accidental damage and vandalism, for example if somebody causes damage to your car when it is parked in the street and they then drive off. Plus you’ll be able to drive hire cars or other people’s cars if you have their permission, although this will probably only be Third Party.
Fully Comp is a good idea if your car is worth more than £1,500 and gets more important the more valuable you car is. Many insurers will only offer fully comprehensive cover for higher value cars anyway.
There are a few ways of cutting the cost of fully-comprehensive cover, Tesco Value* insurance offers a comprehensive policy but limits the repairs to garages it has relationships with, which lowers the cost. However this doesn’t automatically make it cheapest, ensure you first use the comparison sites in the Cheapest Car Insurance article to check.
Don’t think third party’s cheaper than comprehensive
Counter logically lesser third-party policies often cost more than fully-comp.
Why? Car insurance rates are set by actuaries, who’s job is to calculate risk. And it’s likely third-party buyers are on average a higher-risk group, perhaps as overall they care less about their cars, and so prices are pushed up. To illustrate this in one low risk driver quote, we found £290 for fully-comp compared to £406 third-party.
Yet this isn’t a hard rule, third-party can win, but for price’s sake always check comprehensive out too.
Good luck everyone!