What are the different car insurance policy types?
If you're looking to buy car insurance, it's easy to feel baffled about the different types of policy on offer, especially when there's such a large number of insurers offering such a wide range of different deals.
But it's worth getting to grips with the various levels of cover, as this will ensure you buy the right policy for your particular circumstances.
The main thing to remember is that there are three different types to choose from: third party, third party fire and theft, and fully comprehensive cover.
Third Party car insurance
If you own a car and want to drive on the UK's public roads, third party car insurance is the minimum level of cover required by law.
However, the cover provided by this type of policy is very basic. Third party cover simply agrees to pay for damage caused to other people's property, or compensation or costs related to injuries they sustain, in an incident adjudged to be the fault of the covered driver.
So this cover would pay out if you caused an accident and injured another driver - or their passenger.
But it does have its limitations, as it does not cover the cost of repairs to your own vehicle, and would not cover you if your vehicle was stolen or damaged by fire - meaning you would have to fork out yourself.
For this reason, third party insurance may be better suited to a motorist who drives an older car - rather than someone who owns a sporty little number.
Traditionally, third party insurance policies have cost less than more extensive policies because the cover is very limited. This has prompted certain motorists to try and save money by opting for this type of cover.
However, in recent years more and more young and newly-qualified drivers have opted for this type of policy in a bid to keep costs down, as those who have just passed their test can find the cost of car insurance extremely expensive.
The problem is that, because younger drivers are statistically more likely to crash - and therefore to make a claim - insurers have put up the cost of this type of cover. As a result, third party policies can now actually work more expensive than other, more extensive, types of cover.
Before signing up to a third party only policy, it's worth looking at the other types of policy on offer to check any price differentials.
For more information visit MoneySupermarket's dedicated third party car insurance page.
Third Party Fire and Theft Insurance
If you're looking for a greater layer of protection than that offered by third party only cover, you could consider third party fire and theft car insurance. This type of policy offers the same level of cover as that offered by third party only policies, but in addition, it also offers protection against loss or damage if your own car is burnt or stolen.
If you own a cheaper vehicle, you may want to consider opting for third party fire and theft insurance - rather than fully comprehensive cover - as this could work out cheaper.
But, once again, the key is to do your research, as premiums will vary according to a range of factors including the make and model of the car, along with any safety features.
For more information about this type of cover, take advantage of our third party fire and theft car insurance guide.
Fully Comprehensive Car Insurance
If you're looking for the greatest level of cover from your car insurance policy, you should consider fully comprehensive car insurance. This includes cover for damage to your own vehicle as well as any damage suffered by others from a range of causes, including accident, fire and theft.
This is a greater level of protection than the cover offered by both third party only and third party fire and theft car insurance.
That said, don't assume that all comprehensive policies are the same, as some will cover the policyholder to drive another vehicle, or to drive their own car overseas - but not all will.
As a motorist, you need to take a moment to scour the terms and conditions to ensure the cover is right for you.
Similarly, while some policies will offer additional features such as breakdown cover, legal expenses cover and courtesy cars, these add-ons will not be on offer with every policy, so you need to check this.
If these features are important to you, you should find out at the outset if they are available - or whether you can purchase them as add-ons. But before buying any additional benefits, ask yourself whether you are going to actually make use of them; if not, you are wasting money buying cover that is of no use to you.
Equally, if you're keen to have an add-on such as breakdown cover, you may find that it's cheaper to buy a stand-alone breakdown cover policy rather than buy this as part of your car insurance.
For more details on fully comprehensive cover go to our fully comprehensive car insurance page.
Compare different car insurance types
If you're looking to buy a car insurance policy, you can compare deals from a wide range of providers with just a few clicks of the mouse at MoneySupermarket. This will help you save money by showing you the cheaper car insurance quotes available.
Before making any decision, make sure you compare the deals available at different levels of cover - third party only, third party fire and theft and fully comprehensive - as this will ensure you find the best policy for your needs.
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