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Third-party insurance explained

Third-party insurance covers you if you damage another vehicle, or another motorist makes an insurance claim against you. But it doesn't offer you accident protection for your own car.

Here’s what you need to know about how third-party cover is different compared to other types of car insurance.

Driving in the car on a sunny day

What does third-party insurance cover?

Third-party insurance should cover you for:

  • Damage caused to someone else’s vehicle if the accident is your fault 
  • Any possible personal injury claims made against you - possibly from the other driver or one of their passengers
  • Injury to a passenger in your car
  • Damage to another person’s property during the road accident

If you drive into the side of a car and injure the driver, your third-party policy should pay for the damage to the other car. It should also cover you for any medical expenses gained by the other driver. 

But third-party cover doesn't cover the damage made to your car. It also doesn't cover you for the theft of your vehicle or any fire risk. 

What does third-party, fire and theft cover?

Third-party, fire and theft (TPFT) cover means you’re covered for the same factors included in TPO as well as the following:

  • Damage to someone else’s vehicle
  • Damage to your vehicle caused by fire 
  • Damage to your vehicle caused by theft or an attempted theft
  • The cost of replacing your vehicle if it was stolen and can't be recovered

So, if you're a victim of vehicle theft, a 3rd party, fire and theft policy should pay for its replacement.

If your car’s destroyed by fire, a TPFT policy should cover you too. But if the fire is a suspected arson incident, you need a crime reference letter from the police to support your claim.

Third-party, fire and theft also covers you for third-party claims. For example, if you accidentally drive into the back of someone and damage their bumper, your insurer should cover these repair costs. You should also be covered for any personal injury claims made against you.

But, as with TPO, third-party, fire and theft doesn't cover any damage to your car.

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What’s the difference between third-party and fully comprehensive car insurance?

Third-party is the minimum level of legal cover you need to be on the road, and it offers the most basic of protections.

Fully comprehensive car insurance covers you if your car is damaged in an accident, even when it’s your fault. Fully comprehensive cover is the highest level of cover you can get.

For many people, comprehensive insurance is a better deal as it covers you for most risks.

Third-party insurance mostly protects other people. It’s not designed to help someone recover the cost of an accident to their own vehicle.

The main differences between levels of car insurance

Feature Third-party only (TPO) Third-party theft and fire (TPTF) Fully comprehensive
Covers damage to your car in an accident even if it’s your fault
Fire damage
Cover for anyone else involved in an accident
Other cars or property

Is third-party insurance more expensive than comprehensive?

Historically, third-party cover allowed higher-risk drivers to get reasonably priced cover. But over time the insurance industry saw third-party claims rise.

Insurers saw that drivers with third-party cover tended to have more crashes, with higher-value claims. 

So, insurance companies gradually raised prices for many third-party policies. Fewer third-party policies are now offered and there’s less competition.

This is because, for many drivers, comprehensive policies offer better value for money.

But policies can vary and the cost of your car insurance is calculated based on several factors. These include:

  • Your age and occupation
  • The age of your vehicle
  • Your claims history
  • Your excess
  • The make and model of your car 

Should I get third-party cover?

This is a decision that only you can make, based on your circumstances and your budget. It's up to you to weigh the benefits of third-party cover against other car insurance policy types.

Typically, third-party cover might work if you’re happy to cover the cost of any accident repairs yourself. This is often the case when the value of your car is low.

There are some cases where third-party insurance may be your only option. Some insurance companies, for example, are only able to offer convicted driver insurance at a third-party level. 

While a fully comprehensive policy covers your car’s repairs, there’s also an excess to pay if you make a claim. You need to factor this into your budget. 

But it’s not all about money either. Choosing a car insurance policy with more cover might be a better option for you if you want extra peace of mind. 

How do I get a third-party car insurance quote?

You can compare third-party car insurance with us. The process takes just a few minutes, and if you've used us before, it's even faster. To speed up the process of getting a quote, it’s good to have the following information with you:

  • Your name
  • Your address
  • Your occupation
  • Details about your car including model, engine size and fuel type
  • Details about your driving history, including any claims and convictions

We'll send this information to our trusted insurers who can calculate your insurance cost. You’re then free to choose the policy for you, based on price and the level of cover offered.

Even if it looks like a great deal, a policy is only worth buying if it’s right for you and your car. Take the time to read the policy document so you’re fully aware of what you should be covered for.

Can I still get a no claims discount with third-party insurance?

Yes, you can build up a no-claims discount with third-party insurance. 

This is the case with all types of car insurance. For every year that goes by without making a claim, you build up a discount that’s taken off your next year’s cost.

I don’t want third-party insurance, but I do want cheaper car insurance. How do I get that?

There are lots of ways to get cheaper car insurance. Here, we’ve included 5 ideas to help keep your insurance cost low when you talk to your insurer.

Add a named driver

If you’ve got a spouse or partner, you could put them on your car insurance. Statistically, your car’s less likely to be involved in a car accident if you add a named driver to your policy.

This works best when your partner is similar in age.

Sort your policy out earlier

You should get your renewal notice from your insurance company about 3 weeks before the renewal date. The earlier you sort out your policy, the less expensive it could be.

So, put a date in your calendar and set a reminder to talk to your insurance company and compare quotes to find a better deal.

Don't be afraid to haggle

Haggling is simply asking for a better deal. You might be surprised at what you hear back. 

If you decide to haggle, do it with plenty of time left before your policy renews. 

Downsize your ride

When replacing your car try and avoid modifications or high-end kit. 

Some high-end LED front lights, for example, are now sealed units. This means they cost a lot to replace and, in some cases, they might be uneconomic to repair.

Check your mileage

Part of your insurance costs are calculated on how much time you’re on the road. If you drive 8,000 miles a year rather than 10,000 miles, tell your insurer, as your cover could be cheaper.

Why is it called ‘third-party’?

The name is connected to insurance law:

  • The driver buying the cover is the first party
  • The second party is the insurance company, which takes on the risk
  • The third party is the other vehicle or driver who may be involved in an accident