It’s a legal requirement to have insurance when you take your car out on the road, but you can choose the level of cover you want.
The three main types of car insurance are third party, third party, fire and theft, and comprehensive – but how much protection do each of these provide, and which one should you get?
While it might be tempting to simply seek out the cheapest option, especially when living costs remain high, it’s a good idea to familiarise yourself with what exactly the various types of policy cover before you make a decision. For example, if you opt for the minimum level of cover, your policy won’t pay out for repairs to your car if you have an accident which was your fault.
Here, we explain the different types of car insurance and what they cover – and what they don’t, as well as why it’s vital to always shop around before buying.
Car insurance renewal premiums have a habit of increasing every year, even if you haven’t made a claim. Compare car insurance quotes from more than 110 UK providers.
How does third party car insurance work?
Third party cover is the most basic type of car insurance, and the minimum level of cover that a car owner needs to have if they want to drive in the UK.
If you have third party car insurance, any damage done to vehicles other than your own is covered, assuming the incident was your fault. This means that the insurer will pay for repairs to other vehicles if you cause an accident that damages them. Personal injury claims are also covered, so the policy will pay out if, for example, you injure another motorist, a passenger in your or someone else’s car, or a cyclist or pedestrian. If the other driver is at fault, they or their insurance provider will pay for the damage instead.
Damage to property such as lamp posts or someone’s garden wall may also be covered, though you should check the exact terms of the policy if you’re unsure.
Third party car insurance does not cover costs relating to injuries to yourself or damage to your own car. If you have personal injury costs or car repair costs from an accident where someone else was at fault, their third party insurance should cover it. However, if these costs arise from an accident that was your fault, you will have to pay them yourself. Third party insurance does not cover you if your car is stolen or damaged in other ways.
Is third party cover the cheapest type of car insurance?
You might assume that third party cover is the cheapest kind of car insurance since it covers less than comprehensive policies, – but this isn’t always the case.
Third party cover may actually be more expensive because it’s often bought by younger motorists, or drivers who are considered more irresponsible by insurers – in other words, drivers who are more likely to make a claim. As with any type of insurance, the more likely you are to make a claim, the higher the cost of cover.
Make sure to compare quotes – even for different levels of cover from the same provider – and see whether you can actually get a higher level of cover for less money.
What is third party, fire and theft car insurance?
The next level up from third party cover is third party, fire and theft cover.
This covers everything that third party cover does and, as the name suggests, the cost of repairs or replacement if your vehicle is stolen or damaged by fire. It sometimes also covers damages caused by attempted theft – for example, if the thief has broken a window in the process.
Bear in mind that insurers can be particular about the claims they accept for fire, damage and theft if they think you didn’t do enough to protect your vehicle. For example, if you leave your car unlocked and out in the open, your claim is unlikely to be accepted.
Check the policy very carefully so that you know where and how to park your car to ensure that you can make a successful claim if something happens to it. You should also make sure you know how much you’re liable to pay in the event of a claim, which is your policy ‘excess’.
Compare cheap car insurance quotes
Car insurance renewal premiums have a habit of increasing every year, even if you haven’t made a claim. Compare car insurance quotes from over 110 UK providers – you could save up to £530* per year.
*51% of consumers could save £529.95 on their Car Insurance. The saving was calculated by comparing the cheapest price found with the average of the next five cheapest prices quoted by insurance providers on Seopa Ltd’s insurance comparison website. This is based on representative cost savings from February 2024 data. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.
What is comprehensive car insurance?
The broadest level of cover is fully comprehensive car insurance. This is the most popular option for drivers, and is often the only option available to cover new or particularly valuable cars.
This level of insurance typically covers:
- Damage to your car or another vehicle, regardless of who was at fault
- Injuries either to you or another person
- Fire damage to your car
- Malicious or accidental damage to your car
- Theft/damage caused by attempted theft
You will likely have to pay an excess if you make a claim on comprehensive car insurance.
What extras can I get on a car insurance policy?
Providers may offer certain extras with a comprehensive policy. Popular car insurance extras include:
- Personal possessions cover – theft or damage of items left in the car is often included in a comprehensive policy by default, but you should check carefully and think about getting it as an extra if it isn’t. Avoid leaving money or valuable items in your car if possible.
- Breakdown cover – you will receive free roadside assistance if your car breaks down.
- Courtesy car cover – if an accident renders your car unusable, you will have a paid-for replacement vehicle until yours is repaired or replaced.
- No-claims bonus protection – a no-claims bonus is a discount on your insurance if you’ve not made any claims for a number of years.
- Windshield protection – often included in comprehensive cover, protection against chips or scratches to your windshield may instead be available as an add-on.
- Legal cover – your legal costs will be covered if you want to take someone to court over a motoring accident, or if someone wants to do the same to you.
What type of car insurance should I get?
The type of car insurance that’s most suitable for you may depend on your driving habits and the vehicle you drive.
In most cases, comprehensive cover is the safest bet, as it covers the most outcomes, including almost any kind of damage to your car and your own injuries. You may, however, consider a lower level of cover if it is a car that you rarely drive.
Ultimately, though, the right level of cover for you will depend on what you feel the most comfortable with – a higher price tag for a comprehensive policy is often worth paying for peace of mind.
If you are in the market for a new car insurance policy but don’t know where to start looking, you can compare quotes from over 110 providers using our car insurance comparison tool. Simply enter your details to start comparing.
How can I lower my car insurance premiums?
You shouldn’t settle for a type of insurance that covers less than you want just because it’s cheaper – there are lots of ways to knock down the cost of a pricier policy. Check out our article 10 practical tips to reduce your car insurance premiums for more ways to save.
Or, if you’re looking to reduce your motoring costs more broadly, there might be changes you can make to the way you drive to keep down the amount of fuel you use – read more in our article 11 ways to keep fuel costs down. Finally, our article Ten ways to save on car and travel costs contains ways to save on travel across multiple modes of transport.
Rest Less Money is on Instagram! Check out our account and give us a follow @rest_less_uk_money for all the latest Money News, updated daily.
* Links with an * by them are affiliate links which help Rest Less stay free to use as they can result in a payment or benefit to us. You can read more on how we make money here.
Compare cheap car insurance quotes
Car insurance renewal premiums have a habit of increasing every year, even if you haven’t made a claim. Compare car insurance quotes from over 110 UK providers – you could save up to £530* per year.
*51% of consumers could save £529.95 on their Car Insurance. The saving was calculated by comparing the cheapest price found with the average of the next five cheapest prices quoted by insurance providers on Seopa Ltd’s insurance comparison website. This is based on representative cost savings from February 2024 data. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.