There are three main types of car insurance: Third Party only, Third Party Fire & Theft and Comprehensive. Here we look at the features of each type and give their pros and cons.
Third Party is the most basic type of car insurance available. It only covers damage you might do to property belonging to someone else, or the medical expenses for others you hurt in an accident. No damage you or your car might suffer in an accident is covered.
On the plus side it's the cheapest cover available and provides your basic legal insurance requirement. On the downside it leaves you with no safety net if your car is damaged in an accident. You would have to find the money for repairs, or a serious accident could leave you without a car altogether and having to find the money for a new one.
Third Party Fire and Theft (TPF&T) cover will pay for damage you do to someone else, as described above. It will also pay out for your own car, but only if damaged by fire or attempted theft, or if your car is actually stolen. However, repairing or replacing your car if you damage it in an accident will still be down to you.
This is a cheaper form of cover, offering some protection for you if you lose your car outright through it catching fire or being stolen.
It's most often used for cheaper cars that, if insured with a Comprehensive policy, would likely be immediately 'written off' by an insurer after an accident rather than repaired. And whose low value would mean the insurer would pay out little cash after the excesses are taken into account.
With TPF&T cover, you balance the risk of having to find the money to repair your car, or buy a new one, in the event of an accident, against what you're saving over the cost of a Comprehensive policy. How big a saving that may be will depend on your own personal circumstances.
So think carefully about the value of your car, the extra cost of Comprehensive cover, and your own driving record, to decide whether you want to take that risk.
Comprehensive (often called 'fully comp') covers damage to third parties as described above, plus loss of or damage to your own car, whether caused by an accident, vandalism, fire, theft or damage you accidentally do to it yourself.
Cover for a broken windscreen or windows is also normally included.
However, Comprehensive car insurance does not cover absolutely everything that could go wrong with your car. Wear and tear faults, and the causes of breakdowns, are not covered. There will also be other exclusions in the small print. The insurance company will either repair your car for you or, if the repair would be more expensive than what the car's worth, write the car off and pay you its market value - after deducting any excesses the policy requires you to pay.
Because there are often disputes about a car's 'market value', some insurers will now try to find a matching car for you, rather than just pay you. If the car was nearly brand new when damaged beyond repair, and you are the first registered owner, some insurance companies will replace it with another new one.
The big plus in having Comprehensive cover is peace of mind in the event of an accident, or any damage being done to your car. Most eventualities will be covered, your insurer should organise the repair of your car, and many will provide a courtesy car for you to use while your car is out of action.On the downside you'll pay significantly more for this type of cover, especially younger drivers or those with a poor driving record. Even experienced drivers could pay around £100 a year more than for a TPF&T policy.