What Are the Different Types of Car Insurance UK?

Discover the Different Types of Car Insurance and Which One Suits You

Types of Car Insurance Cover

As a car owner, car insurance is a legal requirement unless you’ve registered your vehicle as off the road (SORN). However, the levels of cover you get with your insurance vary from policy to policy and from insurer to insurer.

There are three main types of car insurance to choose from:

– Third party – this type of car insurance offers the lowest level of coverage, usually protecting you against damage to someone else’s car or another person, but it doesn’t cover injuries to you or damage to your car.
– Third party, fire and theft – this type of cover includes everything from a standard third-party policy, but also protects you against fire damage and/or theft of your vehicle.
– Fully comprehensive – this type of car insurance policy offers the highest level of protection, covering you and other drivers for injury compensation, as well as damage, fire and theft of your own vehicle and those belonging to other drivers – whether the accident is your fault or not.

In this guide, we’ll outline all the different types of car insurance cover to help you understand which policy suits your needs best. Read on to learn more about the main types of car insurance in the UK, what they each cover, and how the excess fits into the picture.

What Type of Car Insurance Do I Need?

When it comes to car insurance, choosing the right policy for you isn’t easy – especially when different insurers offer all kinds of policies and deals. Yet, it is essential that you fully understand the different types of car insurance to make sure you’re properly covered should you have an accident.

Many motorists are simply tempted by the cheapest car insurance policy, but that isn’t always the best option. Instead, you should consider whether it might be beneficial for you to pay for extra cover.

In this article, we’ll talk you through all the different types of car insurance and the level of cover they provide. After reading this guide, you should have a better idea of which car insurance policy suits your needs best.

What Are the Different Types of Car Insurance?

What is Third Party Insurance?

Third-party only car insurance is the minimum legal cover required for drivers – and even though it offers the least protection of all three types of car insurance, it tends to be the most expensive.

Typically, third-party car insurance covers damage to someone else’s car or property, and injury caused to other people. However, it does not cover you – for example, if you’re injured in an accident, or your car is stolen or damaged in a fire.

As the name suggests, third-party car insurance covers injuries or damage to third parties, such as:

– Injuries to other people, passengers or animals
– Damage to other people’s property
– Accidents caused by a passenger or a named driver on your policy
– Any passengers in your car who are injured in a collision where you’re at fault

What is Third Party, Fire and Theft (TPFT) Insurance?

Third party, fire and theft policies offer the next level of protection up from third-party only. As well as protecting you against everything in third-party, they cover you for your own car. So, if your car is stolen or damaged by fire or an explosion, you will be able to claim on a third-party, fire and theft car insurance policy.

However, it’s important to note that this type of car insurance cover won’t protect you against accidental damage to your car. And, as with third-party, you won’t be covered for damage to your car or injury to yourself if the accident is your own fault.

Third-party, fire and theft policies can sometimes be the cheapest option, and may be attractive to young drivers who have older, lower value cars. However, car insurers see young drivers as high-risk and so the cost of third-party options can become more expensive than comprehensive policies. Plus, not every insurer offers third-party or third-party, fire and theft insurance options.

What is Comprehensive Insurance?

Fully comprehensive car insurance is the highest level of cover you can take out to protect your car. Usually, this type of car insurance policy covers everything in the above policies, as well as adding extra protection for your own car, you and any other passengers.

Some comprehensive car insurance policies may also provide cover for your windscreen, personal contents such as a sat-nav, medical costs, or a trailer fixed to your car. Meanwhile, other policies might include a courtesy car or include cover if you drive your car outside the UK.

Not all comprehensive car insurance policies will include these benefits, though, and others may offer them at an additional cost. So, it’s important that you check the policy you have chosen includes everything that you want or expect it to.

What is Car Insurance Excess?

If you make a claim on your car insurance policy, insurers will typically require you to pay a certain amount towards the cost of repairing the damage to your vehicle. This is called the excess and it is made up of two parts: compulsory excess and voluntary excess.

Compulsory Excess

The compulsory excess is determined by the insurer and you must pay this amount in order to make a claim. The compulsory excess amount might be relatively higher if you are young or a new driver as there is more risk of you being involved in an accident. Expensive vehicles can also command a higher compulsory excess.

Voluntary Excess

This is the amount you are willing to pay towards a claim. But why would you want to pay more excess than you need to?

You may want to pay more voluntary excess as it may lead to a reduction in your car insurance premium. However, there is usually both a maximum and minimum voluntary excess you can opt for.

For example, if you make a claim for £700 worth of damage and your combined compulsory and voluntary excess is £200, you will be responsible for paying £200 of the total cost, while the insurer will cover the remaining £500.

In cases where you weren’t at fault for the claim, insurers are likely to waive the excess because they will be able to meet the cost from the other driver’s policy. However, this might not be a standard part of the policy, so you should check before making a claim.

Which Type of Car Insurance is Cheapest?

There is no set answer to this question. The cheapest type of car insurance will depend on your individual circumstances:

– your age
– your job
– where you keep your car
– other named drivers on the policy
– the make and model of the car
– whether you have any motoring convictions

While all these factors will affect the price of your car insurance, fully comprehensive does usually tend to be the cheapest option, even though it offers the highest level of protection.

You would assume it was the other way around – and it used to be. However, insurers started noticing that they were getting more claims on third-party only policies, because younger or newer drivers would choose the cheapest option. This pushed the price of third-party only policies up, so the trend reversed – and now, fully comprehensive is the cheapest type of car insurance cover.

What Are Car Insurance Extras?

There are several add-ons also available with any type of car insurance policy. Some will come as standard with a fully comprehensive policy, but every insurer is different, so you should check before making any final decisions.

Some car insurance extras might include:

– Breakdown cover: if your car breaks down, this will cover the cost of getting your car picked up and taken for repairs
– Personal accident: if someone is seriously injured or killed in a car accident, this will provide compensation
– Motor legal: this can help if you need to take legal action after an accident that wasn’t your fault
– Courtesy car: if your car is involved in an accident and damaged, having courtesy car cover means you’ll be provided with a temporary car while yours is repaired
– No claims discount: this means, if you never make a claim, you can get cheaper premiums by choosing no claims discount
– Windscreen: this will cover the cost to repair your windscreen if damaged in an accident
– Misfuel: this will help you cover the repair costs of you fill up with the wrong fuel
– Lost keys: if your car keys are lost, stolen or damaged, this will cover the cost for a new pair

Which Type of Car Insurance is Right for You?

So, ultimately, which type of car insurance is right for you will depend on your own personal circumstances.

If you’re a young or relatively new to driving, you should expect your premium to be more expensive regardless of which type of policy you opt for. However, you’d probably by best choosing a fully comprehensive policy, as this is likely to be cheaper and offers you the most protection.

Once you’ve decided which type of car insurance cover is right for you, it’s important to properly think about whether you require any extras.

Take a look at some of our other vehicle-related articles:

Check out our full DVLA guide