Third Party Car Insurance

The cost of car insurance is on the increase: the average premium shot up by 40% last year to more than £900. The high price might tempt some people to do without car cover completely, but it would not be wise. It is an offence to drive a car on a UK road without at least third party insurance. If you are caught without appropriate cover, you will be given points on your licence and ordered to pay a fixed penalty. Police even have the power to seize the vehicle.

Is third party insurance enough?

Third party insurance is the minimum legal requirement in the UK, but it has its limitations. A third party policy covers any liability for injury to other people - including your passengers - and damage to another person's property. So, if you drive into the back of someone's car, denting their vehicle and knocking over their garden wall, the policy will pay out.

You will also be covered for any accidents that arise from the use of a caravan or trailer attached to your vehicle, as well as any accidents caused by your passengers.

A third party insurance policy does not, however, cover you or your car if you are to blame for an accident. In the example above, you would have to pay for any damage to your own vehicle. If your car is damaged in an accident that is the fault of another driver, you would make a claim against their insurance. 

What if your car is stolen, destroyed in a fire or damaged by vandals? Again, third party car insurance would not pay out, so the cost of any repairs or a new car would come out of your own pocket.

If your car is not worth very much, you might decide that third party insurance cover is adequate. But you should always compare the price with comprehensive insurance to make sure you are getting a good deal.

Is third party insurance cheaper than fully comprehensive?

Drivers, particularly young male drivers, traditionally opted for third party car insurance because it was usually cheaper than comprehensive cover. But the increase in popularity of third party policies has pushed up the price. Young male drivers are statistically more likely to make a claim, so they are more expensive to insure. And insurers recoup the higher cost by charging higher premiums.

The balance has now almost tipped the other way and it is often cheaper to buy fully comprehensive insurance than more basic cover. Even if comprehensive insurance is a bit more expensive, it could still prove better value because of the extra cover it provides.

Find cheap third party insurance quotes

There are also several steps you can take to cut the cost of third party insurance:

• Shop around: one in four drivers automatically renews their policy with their existing insurer. But loyalty doesn't always pay. You can compare quotes for all types of car insurance with MoneySupermarket's free independent comparison service. It can help you find the best policy at the most competitive price.
• Check you car's rating: Insurers put cars into one of 50 groups according to a number of factors including engine size. Cars in the higher groups are costlier to insure than vehicles in the lower groups. You can find out more about this on our car insurance groups page.
• Park you car with care: If possible, keep you car in a locked garage overnight. If you don't have a garage, it will be cheaper to insure your vehicle if you can park it off the road, perhaps in a driveway.
• Keep your car secure: Fit your car with an approved alarm or immobiliser and you could earn a discount on your premium.
• Don't claim on your policy: Insurers reward careful drivers with a no claims discount (NCD) - and an NCD can knock as much as 75% off your premium after five years.
• Increase your excess: Motor policies come with a compulsory minimum excess, which is the amount the policyholder has to contribute to any claim. If you negotiate a higher voluntary excess, you should also be able to negotiate a lower premium.
• Drive fewer miles: the less you drive your car, the less likely you are to make a claim - and the less you should pay for your insurance. So talk to your insurer about a lower mileage limit if you don't use your car very often, or only for short journeys.