The Best Types of Car Insurance in the UK Explained
What type of car insurance do I need?
Trudging through endless lists of car insurance quotes can be tedious and frustrating, especially if you don’t know which type of cover would be best for you.
With so many deals, policies and providers available in the UK, it pays to be aware of the main different types of car insurance available so that you know exactly what you’re looking for when comparing quotes online.
This quick guide to the main types of car insurance in the UK walks you through each policy, their benefits, potential drawbacks, and whether they would be sufficient enough to cover you and your vehicle.
In this guide:
There are three main types of car insurance policies to choose from in the UK:
Each type of policy differs in terms of the level of cover it provides, as explained individually below.
Car insurance is legally required to drive on UK roads, and the minimum level of cover required is a third party policy. The most extensive cover is comprehensive car insurance – which provides more protection than all other types of cover.
Third party car insurance is the minimum level of cover legally required to drive on UK roads. Since the Continuous Insurance Enforcement legislation came into force in 2011, all drivers are required to be insured all year around.
What does third party car insurance cover?
The cover provided by third party car insurance is limited and really quite basic, focussing on damage caused to other people – i.e. third parties.
Third party insurance covers:
Costs relating to damage to other people’s property
Compensation for injuries to third parties
If you are involved in an accident that was your fault, you are covered for damages to the third party’s vehicle, and any injuries they or their passengers may have suffered. It also covers injuries to passengers travelling in your vehicle, meaning the only party not covered is yourself.
Disadvantages of third party car insurance
Being the least comprehensive level of cover available, there are obviously some limitations to third party car insurance.
It does not cover the cost of any repairs to your own vehicle
Your car is not covered if it is stolen
Costs associated with damage caused by fire is not covered
There are quite a few eventualities which would leave you paying from your own pocket to repair or replace your car if you only have third party cover in place, meaning that most drivers with new vehicles tend to avoid it.
Being the least extensive type of cover available, you may assume that it’s also the cheapest – but that’s often not the case.
Historically, because it was so cheap, third party cover became popular with new, young and higher-risk drivers, who are reported to be almost 20% more likely to crash than other groups of people. The amount of claims made on this type of policy therefore rose, and in-turn, the cost has now increased beyond other types.
Don’t assume that it will be the cheapest policy simply because it offers the least protection. Fully comprehensive car insurance can work out cheaper than third party cover, despite providing far more protection – compare quotes and shop around for the best deal on a sufficient level of cover.
Who would benefit from third party cover?
There are some cases where third party car insurance makes sense – to those with less expensive, older cars, for example.
If you have an older car, it would not cost as much to repair or replace compared to an upmarket, luxury vehicle. In which case, it may be worth considering whether you would save money in the long-run if you were to take out third party cover alone.
Third party, fire and theft car insurance – often labelled TPFT cover – is the next step on the car insurance hierarchy.
This type of cover provides the same protection as third party insurance, along with added protection against the cost of repairing damage caused to your car by fire or theft.
What does third party, fire and theft car insurance cover?
With this level of protection, the following is usually covered:
The cost of repairing damage to other people’s property (vehicles)
The cost of claims and compensation for injuries to other drivers and passengers
The cost of repairing damage done to your car as a result of fire
The cost of repairing or a finding a replacement vehicle if yours is stolen
Who would benefit from third party, fire and theft cover?
Again, similarly to third party cover, people with cheaper or older vehicles may want to consider third party, fire and theft insurance.
Although it is a genuine option for some people, fully comprehensive cover is still likely to be cheaper despite offering more cover, as those who take out TPFT are more likely to claim, according to insurance providers.
Ensure that you get quotes for all types of car insurance policies though, because the cost of premiums will vary from one driver to another in relation to their personal situation and needs.
Fully comprehensive car insurance is the most extensive level of cover available to drivers in the UK, providing more protection than both third party car insurance and TPFT cover.
Historically, it used to be the most expensive – which made sense because it provided the most cover – but since the cost of other types of insurance was boosted by more high-risk drivers taking out policies, many now find that fully comp is also the cheapest type of car insurance, as well as the most substantial.
What does fully comprehensive car insurance cover?
Fully comprehensive car insurance covers:
Damage to your own vehicle (from a wide range of causes)
Damage to other vehicles (from a wide range of causes)
Injuries suffered by others (from a wide range of causes)
As well as the above, some policies (depending on the provider) will also cover:
Driving another car
Driving your car overseas
You are also able to add a courtesy car policy and breakdown cover if needs be, as optional extras.
Read more: A Guide to Car Insurance Optional Extras
Not all fully comp policies are identical – some will include and exclude different things – making it crucial that you gather various quotes from several providers and determine exactly what eventualities are covered with each.
The benefits of fully comprehensive car insurance mean that it is suited to almost all drivers, especially those looking to protect their own vehicle.
Car insurance is legally required for all drivers in the UK - as enforced by the Continuous Insurance Enforcement (CIE) legislation - so you must have cover in place.
The type of car insurance that would be best for you depends entirely on your personal needs, requirements and situation.
When choosing a policy, think about which type best suits your circumstances and the level of cover that you require, in relation to how often you use your car, how much it would cost to repair or replace, and so on.
It’s important that you shop around before committing to a provider or policy – you need to find the best level of cover for your situation at a fair and competitive price.
Before signing on the dotted line and handing over your money, ask yourself:
Is this level of cover sufficient enough for me?
Is this the best price for this level of protection?
Although the most important factor is that you get a good enough level of cover to protect you from as many eventualities as required, the cost should also be on your mind.
The cost of car insurance is influenced by your:
Car’s make and model
Shop around and get as many quotes as possible to find the best and cheapest car insurance deal for you.
We hope that our guide to the main types of car insurance has left you well-placed to make a decision on which policy best suits your situation. If you would like to know more about car insurance and other related topics, take a look at our range of articles and resources here.