What are the three different types of car insurance policies one should consider?
Why is it so difficult to make a choice when comparing car insurance, especially when numerous insurance providers are offering different types of policies and attractive deals?
What does car insurance cover and what does not it cover?
In this article, we shall be discussing the difference between each level of car insurance coverage so that you can always make an informed decision and no insurer will ever rip you off again.
What Are the Different Types of Car Insurance?
There are basically three types of car insurance policyholders can choose from:
- Third party
- Third party fire and theft
- Fully comprehensive
These different types of car insurance policies offer different covers. The minimum level of car insurance required by law is the third party. However, you can only get limited protection.
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If your goal is to get a more robust type of insurance, then you will have to consider getting a fully comprehensive policy.
1. Third Party
What type of car insurance do I need to drive on the United Kingdom’s public roads? The answer is third party car insurance.
Third party car insurance policy is the legal minimum car insurance package needed to drive anywhere on the UK’s roads.
It doesn’t matter whether you drive your car everyday or not, you are required by law to renew your third party car insurance policy every year.
The reason why you must renew your third party car insurance every year is because the Continuous Insurance Enforcement legislation mandates the law enforcement agents to arrest anyone that violates the order since 2011.
How does third party car insurance cover work? The role of this type of vehicle insurance is to pay for any damage caused to other people’s property, or compensation or costs related to injuries they sustain as a result of an accident caused by your car.
If an accident takes place and investigation shows that you are at fault, your third party cover will pay for the medical expenses of the other driver and their passengers, including the cost of fixing their damaged car or property.
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Why is third party policy so cheap compared to other types of car insurance? The reasons are:
- It’s a basic type of insurance.
- It covers everyone except you.
- It doesn’t cover the cost of repair of your own car
- Third party car insurance policy doesn’t cover you if your vehicle was stolen or damaged by fire.
- You aren’t getting a new car for replacement if anything happens to your car.
- It’s a super-easy way to save money on your auto insurance policy but that was until insurers began to notice that the majority of the policyholders who opted for this were mainly young and newly qualified drivers.
What is the third party car insurance cost? In 2020, the average cost for a third party policy was £1,306 per year – that’s twice as much as the average fully comprehensive policy.
2. Third Party Fire and Theft Insurance
Are you considering getting an additional layer of protection than the one covered by a third-party policy? Or you own a cheaper car that is easier to insure and wouldn’t want to pay so much for your car insurance policy?
If yes, then you should go for one that covers you more than third party policy does, and that is, third party fire and theft car insurance.
Third party fire and theft policy contains everything in third party only policy except that it has an extra layer of protection that covers you when your car is stolen or damaged by fire.
If you own a cheaper car, there’s no need going for fully comprehensive cover – you can settle for third party fire and theft insurance.
In June 2020 the average third party fire and theft policy cost £823 a year. That’s still more expensive than the average fully comprehensive policy quote by over £300.
You must understand that there are many other factors that affect your car insurance rate. Some of these factors include but are not limited to the make and model of your car, anti-theft devices in your car, location, age, marital status, etc.
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3. Fully Comprehensive Car Insurance
What is fully comprehensive car insurance and what does it cover? What are the most interesting advantages of comprehensive car insurance?
Fully comprehensive car insurance is the highest level of car insurance coverage. This type of insurance covers your car damage and for any other damages done by your car to other drivers and passengers.
It covers everything in both third party and third party fire and theft insurance, and more. Before now, fully comprehensive insurance used to be the most expensive car insurance policy until recently when trends showed that younger drivers who bought third party only insurance were involved in more accidents. This prompted insurers to drastically reduce the cost of fully comprehensive insurance.
In June 2020 the average cost of a fully comprehensive policy was £490 per year. Check out this article to know the things that are covered by comprehensive motor insurance.