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Car insurance policy types explained


Figuring out which level of cover suits you can be a headache. Here’s a quick rundown of the most common policy types and what they do.

insurance policy

Anyone who drives a car is required by law to have their car insured. Failing to do so could land you with a fine of up to £5,000 and possible disqualification.

So you have to get insured, that’s a given. But how much cover you get is up to you.

There are three common types of cover available to you. Each has its own benefits – and comes with its own price tag:

  • third-party only
  • third-party, fire and theft
  • comprehensive

When getting an insurance quote, it’s worth looking at how much it costs to insure your car for each level of cover before you buy.

It’s good to save money, but it’s also good to strike a balance between how much you pay and how much protection you get. Don’t compromise on cover just to save a few quid.

Third-party only

This is the most basic level of cover, and the bare minimum required by law. All three policy types have this.

If you cause a road accident and someone else is injured or their car is damaged, it’s not fair for them to have to pay out of their own pocket to fix this.

This is where third-party cover comes into play, which covers:

  • damage to other vehicles
  • injury to other people and animals
  • damage to property

You aren’t covered for damage to your own car, or any injuries you sustain after an accident that’s deemed to be your fault. That’s coming out of your own pocket.

Third-party, fire and theft

A third-party, fire and theft policy has all the benefits of a third-party policy, but with one or two extras.

As the name suggests, the policy offers extra protection for your car if it’s stolen or catches fire.

This kind of policy may also cover you for damage that happens as the result of an attempted theft, eg if a thief breaks your window to steal your stereo.

Comprehensive cover

car key

This level of cover gives you all the benefits of third-party, fire and theft, but with a few added extras.

For one, a comprehensive policy covers damage to your own car, even if an accident is deemed to be your fault.

Comprehensive policies also tend to have cover for windscreen damage.

Some insurers may also throw in a courtesy car with comprehensive policies, but not all of them do.

It’s a commonly-held belief that comprehensive policies are the most expensive to buy, since they offer the most benefits.

This isn’t always the case. Higher-risk drivers tend to go for third-party policies as a means of lowering their costs. As a result, the cost of third-party policies go up.

Although many people refer to comprehensive insurance as “fully comp”, it may not offer absolutely everything.

For example, breakdown cover might not come as standard on most policies, so you’ll have to pay extra if you want all the bells and whistles.


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