Types of car insurance – Explained

The choice of car insurance depends on your budget and the level of coverage required. We’ll outline the various types available and what each of them provides.

What are the different types of car insurance?

There are three primary types of car insurance available: third party, third party, fire and theft, and fully comprehensive.

It’s essential to compare all your car insurance options to find the best deal for your needs.

Third party insurance is a legal requirement for every driver.

It covers damages to other vehicles or injuries to other individuals caused by you, but it won’t cover your injuries or damage to your own car.

Third party, fire and theft insurance offers the same coverage as a standard third-party policy and provides protection in case your car is stolen or damaged by fire, including both accidental and deliberate fires like arson.

Fully comprehensive insurance; often called ‘fully comp,’ provides the highest level of protection, covering a broader range of situations.

Now, let’s delve into more detail about how these different types of car insurance work.

Third party insurance

Third-party insurance is the minimum legal requirement for car insurance. While one might assume that third-party only insurance would be the most affordable option due to its limited coverage, it may come as a surprise that this isn’t always the case.

The reason is that third-party insurance is often chosen by motorists considered risky by insurance providers, such as young drivers and those with convictions, leading to higher premiums.

Third party insurance typically covers:

Coverage includes:

  •  Damage to someone else’s car or property.
  • Injury caused to others by you.
  •  Injury to your passengers during an accident.

Third party insurance doesn’t cover:

As the policyholder, you are responsible for:

  • Covering the cost of replacing your car if it is stolen, damaged in a collision, or affected by fire.
  •  Bearing the expenses for your injuries in case of an accident, as your policy won’t provide coverage for them.

Third party, fire and theft insurance

Third-party fire and theft insurance provides all the benefits of a third-party car insurance policy, along with additional protection against fire and theft.

This coverage proves valuable if you desire more than the basic level of insurance or reside in an area with high crime rates.

However, it’s essential to be aware that some policies might not cover damage caused by attempted theft, so it’s crucial to carefully review your policy.

Third party, fire and theft insurance typically covers:

Coverage includes:

  •  Damage to someone else’s car or property.
  • Injury caused to others by you.
  • Injury to your passengers in an accident.
  •  Fire damage (after you pay your excess).
  • Theft and possibly damage caused by attempted theft (after you pay your excess).

Additional types of car insurance

The three primary types of car insurance offer different levels of protection, but there are also some more specific types of insurance worth considering:

Telematics insurance

Also referred to as ‘black box’ insurance, this policy involves fitting your car with a monitoring device to track your driving behavior. Demonstrating safe driving habits can lead to reduced car insurance rates.

This type of insurance is particularly popular among younger drivers who usually encounter higher premiums.

European driving insurance

If you’re planning to drive abroad, it’s essential to ensure you have the necessary insurance coverage for your chosen destination.

Classic car insurance

For proud classic car owners, this one’s tailored to your needs. Classic cars are often well-maintained and driven less frequently, and this insurance takes these factors into consideration.

Specialist car insurance providers are well-versed in vintage, performance, or modified vehicles, allowing them to offer you personalized policies.

Car insurance extras you can add to your policy

You can easily add these additional features to your car insurance policy for an extra fee:

1. Breakdown cover: This common add-on ensures you won’t be left stranded if your car breaks down.

2. Personal accident cover: Usually included in comprehensive policies, it provides compensation if someone is seriously injured or killed in a car accident.

3. Motor legal protection: If you need to take legal action against another driver or someone takes action against you after an accident, this coverage can handle your expenses.

4. Courtesy car cover: In case of an accident, you’ll receive a courtesy car to keep you on the road while your vehicle is being repaired.

5. No claims discount protection: Safeguard your no claims discount, which can significantly reduce your car insurance costs, by adding this protection to your policy.

6. Windscreen cover: Often included in fully comprehensive policies, but make sure to read the fine print and verify.

7. Lost keys cover: With electronic keys becoming more common, replacing lost sets can be costly. This cover ensures you’re protected if your car keys are lost or stolen.

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