What are the different types of car insurance?

Key takeaways

• Car insurance comes in three main types: third-party only, third-party, fire and theft and fully comprehensive, each offering varying levels of protection and cost

• You can also get specialist policies such as telematics or electric car insurance

• The right type of car insurance for you will depend on factors like your car’s age and your budget

What are the three main types of car insurance?

Car insurance comes in three main types, each offering varying levels of protection and cost:

💡Top tip: Fully comprehensive policies are sometimes the cheapest option, even though they offer more cover. 52%^[1] of MoneySuperMarket customers get cheaper quotes by selecting fully comprehensive, with an average saving of £176.68^[2].

Do I need car insurance?

Yes, in the UK it’s a legal requirement that every driver has car insurance to drive on public roads. It ensures that if you’re involved in an accident you have some form of financial protection.

Even if you're not driving your car, it still requires insurance. The only exception is if it’s not used on public roads (for example, you keep it in a garage, on a driveway or on private land) and you register it as “off road” with a Statutory Off Road Notification (SORN).

How do the three main types of car insurance compare?

A fully comprehensive car insurance policy offers the most cover of the three main policy types, and extra benefits – such as windscreen cover or child car seat replacement – are more likely to be included as standard. But what's included can vary by provider so always check the policy details.

Is there a difference between comprehensive and fully comprehensive car insurance?

No, there is no difference in the level of cover between comprehensive car insurance and fully comprehensive car insurance and no legal distinction between the two terms. Both terms refer to the same insurance tier - the highest level of standard car insurance.

‘Fully’ is a marketing term used by insurers to show that you’re getting a full level of cover, which includes cover for damage and theft of your own vehicle as well as damage to third parties, compared to mid-tier third-party fire and theft, and the lowest tier, third-party only.

Which type of car insurance is right for me?

The right type of car insurance for you will depend on factors such as:

• Your age and driving experience: If you’re a young driver, with limited experience, you might need to look at specialist insurance policies such as telematics or black box car insurance

• Your car’s age and value: You might prefer third-party only cover if you have a low-value car or a comprehensive policy if you have an expensive car or one that is less than 12 months old

• Your budget: If you don’t want to budget for unexpected repair bills then a comprehensive policy might suit you best

• Which extras you need: Rather than add lots of extras to a third-party only policy or third-party, fire and theft policy, you might find a comprehensive policy works out better value if it includes those things as standard

Which is the cheapest type of car insurance?

Our latest data shows that fully comprehensive car insurance works out as the cheapest type of insurance, on average, regardless of whether you pay annually or monthly.

But remember that you’ll pay interest on monthly payments, making it a more expensive option than paying one annual lump sum.

Your individual risk factors, such as your postcode and job title, will also be used to calculate which premium is cheapest so it’s worth comparing policies.

Source: Car insurance facts, trends and stats - 2026

Why is fully comprehensive car insurance sometimes the cheapest type?

Fully comprehensive car insurance can be the cheapest option due to how insurers calculate risk. Drivers who opt for fully comprehensive cover tend to be more experienced and careful, and their cars are usually better maintained so they are seen as less likely to make a claim.

By contrast, third-party only policies are more commonly chosen by higher-risk drivers, which can lead to more frequent or more costly claims overall. To reflect this higher risk, insurers may charge more for third-party cover than for fully comprehensive insurance.

Of course, the cheapest option for you will always depend on your personal risk factors.

What other types of car insurance are there?

In some instances, specialist policies may better suit your specific needs:

What are car insurance extras?

Policyholders can add extras to their insurance for specific needs, usually at an additional cost:

• Breakdown cover: Assistance if your car breaks down

• Personal accident cover: Compensation for serious injuries or death

• Motor legal expenses cover: Covers legal costs for non-fault accidents

• Courtesy car cover: A temporary car while yours is repaired

• Windscreen cover: Replacement costs for damaged windscreens

• Replacement key cover: Costs for replacing lost or stolen keys

How do insurers work out the price of different types of car insurance?

Insurers consider a variety of factors when determining the cost of car insurance:

• Age: Young drivers usually face higher premiums

• Job title: Some professions are statistically associated with a higher risk of accidents

• Driving history: A record of past claims and convictions can hike up premiums

• Location: High crime rates in an area can lead to increased premiums

• Insurance group: Cars in higher insurance groups attract higher premiums

• Car make and model: More powerful or expensive cars are usually costlier to insure

• Car value: A higher value can increase the risk of theft and repair costs

• Annual mileage: More miles on the road can increase the risk of accidents

• No claims-discount: How many years you have had car insurance without making a claim results in a no-claims discount

• Named drivers: Adding a named driver can sometimes reduce premiums, it largely depends on the profile of the added driver

• Voluntary excess: Setting a higher voluntary excess payment can help reduce your costs, but make sure you can afford it

What is a car insurance compulsory excess?

Car insurance compulsory excess is the fixed amount you're required to pay towards a claim, determined by your insurer. It's generally higher for drivers who are more likely to make a claim, such as new or young drivers.

You can choose a higher voluntary excess to potentially lower your premium, but be sure you can afford it if you need to claim.

How can I compare car insurance?

The easiest way to find the best deal on car insurance is to use MoneySuperMarket to compare providers. All you do is provide us with a little bit of information about yourself, your car and your situation, and we will show you a range of deals from hundreds of insurance providers.