Car insurance: Why third party cover isn’t the cheapest option

The more comprehensive and inclusive your motor insurance, the more it will cost, right? Actually that’s wrong, new research from has shown.

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It may sound wrong but bear with us – we’ve compared the average costs of almost 1.4million annual car insurance policies and the results are perhaps not what you’d expect.

Many drivers opt for third party car insurance because they think it’s the cheapest option. After all, it offers the lowest level of cover: as the name suggests it only covers a third party if you are involved in an accident that is your fault (it wouldn’t cover any damage done to your own car). The other insurance options are third party, fire and theft (TPFT) and fully comprehensive cover.

However,’s analysis has found that in actual fact, fully comprehensive cover is often the cheapest, despite offering the highest level of protection.

How is this possible?!

If you don’t think this can possibly be true, then run a quote. The average driver will find that their car insurance premiums rocket if they search for third-party-only cover.

But why? It’s always been assumed that the less cover you buy, the cheaper the policy.

Steve Sweeney,’s car insurance expert, explained: “In recent years, drivers with a more 'risky' profile, such as younger motorists or those with driving convictions have opted for this cover to keep the cost of motoring down.

“Providers have reacted to this perceived increase in risk by driving up the cost of third-party only cover.”

After all, insurers are in the business of assessing risk. For example, there’s a higher likelihood of accidents among teenage drivers, so they are charged more. So, if car insurance providers realise that motorists buying third-party only cover are more likely to be involved in accidents, they will rack up the price accordingly - and that’s what’s happened.

Third-party only cover costs an average of £1,927 a year, which is a whopping 109% more expensive than average fully comp cover at £922 a year. The average premium for third party, fire and theft stands at £1,348 – nearly 50% more than fully comprehensive.

It’s not just that riskier drivers go for these policies, driving up the average cost. By choosing third party cover, experienced drivers fall into a riskier category in insurers’ eyes - the result of which is a higher premium for the individual.

Who does it hit the worst?

Younger drivers are perhaps the most at risk of missing out on saving money and getting fully comprehensive car insurance. Many new motorists will take it as read that car insurance is going to be prohibitively expensive, making third party only or third party, fire and theft their only option.

If they don’t check whether that’s actually the case, then they are potentially overpaying – plus they’ll have to meet the cost of their own repairs if they have an accident.

How else can I bring down my car insurance costs?

There are other ways to save money on your motor insurance, especially if you’re a teenage driver. The most important thing is to check that you can afford the cover before you buy a car – our comparison tool lets you run searches on vehicles you don’t yet own.

Engine size as well as the car model and value can affect what you pay – so you could be charged more for one vehicle than another.

Here are some other ways to cut your costs…

Shop around: Don’t assume your renewal quote is the cheapest, not many insurers reward loyalty. People using to find the cheapest deal save an average of £205 a year.

Go online: Many car insurance providers offer their cheapest deals online, so it’s worth using the web to browse cover.

Cut your miles: When applying for car insurance, you have to state your estimated annual mileage. If you can bring that down, perhaps by car sharing or taking the bus or train a few times a week, then you’ll be less risky and your car insurance quotes could be lower.

Older drivers: Inexperienced motorists, particularly younger people, should consider adding a more experienced driver to their policy as this can bring down the price. Don’t be tempted to lie about the main driver, though, this is called ‘fronting’ and invalidates your cover if you’re caught.

Vehicle security: Without a decent alarm and immobiliser, your car insurance premiums are likely to soar.

Pass Plus: Younger drivers who’ve passed their test can take some extra tuition and get their Pass Plus certificate, which shows they have received extra tuition in night-time driving, motorway and town traffic and driving in different weather conditions. You can save as much as 35% on car insurance if you pay to do these extra classes.

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