Car Insurance Policy Types

Car Insurance

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Broadly speaking, there are three types of car insurance available in the UK. These are:

• Third party only
• Third party, fire and theft
• Fully comprehensive

Third party only car insurance

Third party only car insurance is the minimum level of cover required by law in the UK and is also the cheapest.

All road users must have third party car insurance under the rules of the Road Traffic Act but it only covers against liability to others – there is no cover for you if you suffer an injury; or for your vehicle if it suffers damage. Even passengers in your vehicle will not be covered though they could claim compensation against you as the driver if you are at fault.

Instead third party insurance simply covers:

• Injuries to other drivers and their passengers;
• Damage to other’s property including the cost of repairs on another vehicle;
• Passengers for accidents they cause;
• Liability for accidents arising from the use of a caravan or trailer attached to the vehicle.

Generally speaking if you can afford it, you should take out a more comprehensive policy. However, cheap third party car insurance can be the best option for many drivers including new drivers with no insurance history and drivers with cars of very low value for whom a comprehensive policy may be more expensive than the vehicle itself. If your car has a high value then you should opt for a policy with greater coverage than third party only car insurance - third party cover can prove to be a false economy if you do have an accident because the amount you save on the premium could be easily wiped out by the cost of any repairs.

Before searching for a third party car insurance quote think about what you can comfortably afford to pay on car insurance each month. Third party insurance is cheap but doesn't provide the safety net to cover damages in the event of an accident or a replacement if your vehicle is stolen.

Consequently, you should consider whether you have the money to cover repairs or a replacement should your vehicle be written off or stolen, and balance your risk carefully.

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