To drive most vehicles on British roads it is mandatory to purchase a car insurance policy. The minimum requirement is cover to pay out if you cause injury to, or damage to the property of, other people. This guide examines the various levels of cover available and how to work out what policy is right for you.
There are three main levels of car insurance:
Comprehensive – often called “fully comprehensive”, or “fully comp” – is the most complete level of cover you can get for your car.
At its most basic, comprehensive car insurance gives you financial protection against fire, theft and accidental damage to your car, and covers your liability for the health and property of third parties in the event of you causing an accident.
Many fully comprehensive policies will also include cover for:
Driving other cars (find out more in this guide)
Comprehensive cover can offer a lot more protection than the other insurance levels, but not all comprehensive car insurance plans are the same – each insurer will offer different benefits – so shop around.
Some comprehensive policies, for example, offer such benefits as a courtesy car, breakdown cover and motor legal protection as standard, while others may only offer these things as optional extras for an additional premium.
Third party, fire and theft policies – sometimes shortened to TPFT – provide financial cover for vehicle damage and injury you cause to other road users, as well as letting you claim for the loss of, or damage to, your vehicle caused by fire or theft.
Third party, fire and theft cover will not pay out for any damage to your own car in the event of you causing an accident.
Third party only (TPO) is the most basic level of car insurance and it will only pay out to cover damage to other people and their property, not your own costs.
It is the minimum legal level of cover you can get to drive in the UK. Some insurers will not offer this level of cover.
Third party only insurance will also compensate any passengers that suffer injuries while travelling in your car.
Third party cover will never pay for damage to your car.
This table shows what each level of cover could protect you against:
|Damage to third party property||Yes||Yes||Yes|
|Loss or damage caused by fire or theft||Yes||Yes||No|
|Accidental damage to your car||Yes||No||No|
|Uninsured driver cover*||Yes||No||No|
*These may be available as optional extras that can be added to your policy for an additional cost, but many fully comprehensive policies will include them as standard.
Remember: this is only a rough guide and every policy is different. Check the policy documents carefully to see what is covered by each policy.
Don't assume that third party cover will be the cheapest option.
Traditionally, third party levels of car insurance have been the cheapest policies for most drivers because they offer fewer benefits. But while fully comprehensive car insurance offers the best levels of cover, it can still be the cheapest option – depending on certain risk factors such as age and claims history.
High risk drivers have been driven towards third party policies to reduce their insurance costs. Insurance companies, however, now recognise that the risk profiles of many drivers with lower protection policies make them more likely to claim, so increase the cost.
Much depends on your various risk factors: your age and driving experience, the type of car you drive, where you park it and where you live, among many other factors.
For example, a newly qualified driver might still find a third party policy to be the cheaper option. However, in recent years “black box” telematics schemes that monitor and reward safe driving habits have flourished.
If you buy a brand-new car, there’s really no alternative to comprehensive insurance. Many insurers guarantee a replacement of the same make and model if you’ve had the vehicle less than a year.
Meanwhile, someone driving a car that has been on the road for several years and is of low replacement value if damaged beyond repair and written off by the insurer, might save money taking out third-party level car insurance.
Indeed, if your car is worth less than £1,000, think about the costs of claiming on comprehensive cover – given the excess fees and administration charges – and ask yourself if it’s worth it.
If you are looking for the best price for your car insurance, compare quotes for each level. You may find you can get much more cover for less money.
Whether you choose Comprehensive, TPFT or TPO you will also have to tell your insurer how you use your car. There are several different usage types:
Social, domestic and pleasure (SDP) – standard home use of the car, excludes any work driving, including regular commutes
SDP + commuting – if you use your car to drive to work or to the local station each work day
Busines use – if you drive to different workplaces or between workplaces. Exactly why you are traveling will also make a difference: if you travel to clients and carry goods, you will only be insured for the type of goods and activities you detail to your insurer.
Whatever car you drive, make sure you find insurance that covers everything you need as cheaply as possible by comparing all of the policies out there.