What are the different types of car insurance?

Last updated May 26 2021

Car insurance has been a legal requirement since the introduction of the Road Traffic Act in 1930. Drivers found to be driving without the minimum insurance cover could be given a costly penalty for breaking this law.

Third party – This is the legal minimum insurance cover, and all drivers are expected to at least have this cover. This protection covers damages to others but not to yourself.

Third party, fire and theft – This protection includes the third-party basic cover for damages to others but also includes fire damages and theft of your own vehicle.

Fully comprehensive – This protection includes all of the above and covers you and other drivers for injury compensation, as well as damage to your own vehicle and the property of others whether the accident is your fault or not.

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Third Party Insurance

This is the most basic car insurance coverage type and is the minimum legal requirement for drivers. The other coverage types will all include this level of cover. If you are involved in an accident where somebody is injured or a vehicle is damaged, this insurance type offers protection for damage to other vehicles, injury to others and damage to other people’s property.

Third-party insurance does not cover injuries you sustain as the policy holder or damage to your vehicle in the event of an accident.

Third Party, Fire and Theft

This coverage type has the basic cover of third-party insurance and offers extra protection for fire and theft. It offers protection in the event your car catches fire or is stolen. In addition to this, you may also be covered for any damages as a result of attempted theft, such as a broken window to steal belongings inside the car, however this will need to be checked with each insurance provider as not all provide this protection.

Again third-party, fire and theft does not cover injuries you sustain as the policy holder or damage to your vehicle in the event of an accident.

Fully Comprehensive

Fully comprehensive insurance coverage offers the highest level of protection. You will receive a more extensive level of cover than the coverage types above as they are included with additional coverage. This cover includes protection for damage to your own vehicle as well as damage to other vehicles involved in an accident or fire and theft.

Historically, due to the level of coverage provided, fully comprehensive policies were the most expensive of the three coverage types. However, this isn’t always the case and depends on a number of factors. Despite offering a higher level of coverage it can sometimes be the cheaper option and we’d recommend checking each policy type if you’re looking for the cheapest option. What affects the cost of car insurance?

Car insurance could be affected by many different factors, these include:

  • The age of the driver – Typically younger drivers are more expensive to insure.
  • Annual Mileage – Car insurance costs are often based on risk, therefore if you are driving more miles, it is more likely you could be involved in an accident.
  • The car insurance group – The higher the insurance group, the more you can expect to pay for your insurance premium.
  • Where you live – This could affect the cost based on the area you live and where the car is kept during the day and overnight. For example, a car parked on a driveway may be seen as less risk than a car parked on a road or carpark.

Other car insurance coverage types and add-ons

In addition to the three types of policy above, there are other policy types that cater to the specific needs of certain drivers:

  • Multi car insurance – For multiple vehicles registered at the same address and purchase cover from the same provider.
  • Classic car insurance - Specialist cover for the needs of vintage vehicles.
  • Black Box/Telematics insurance – This could be beneficial to new drivers or those with limited driving experience. You can learn more about telematics insurance policies here.

Some providers may offer additional extras at an extra cost, these include:

  • Windscreen cover – A common type of damage to a car due to stones flying up from the road surface where you may be at no fault. If a stone chip develops into a crack, it could be costly to repair if not covered on your insurance policy.
  • Roadside assistance / Breakdown cover – This is as an additional extra in the case of a breakdown. With this cover, you may be able to have your car collected at the roadside and taken to a garage to be repaired where required.
  • No claims discount protection – If you have built up your no claims discount (NCD) it may be beneficial to protect this as it could save you a lot of money each year. This additional cover will protect your NCD if you were to have an accident.
  • Courtesy car – Should your car be involved in an accident and need to be repaired, your insurance provider would provide a courtesy car whilst yours is unavailable.
  • Lost keys cover – This is a potential add-on to your policy to cover the costs of replacing and reprogramming lost or stolen keys.
  • Motor legal protection – This may cover legal costs if you are involved in an accident and want to take legal action against another driver, or if someone takes legal action against you.

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