You don’t get something for nothing. At least, that’s the theory. So when you’re shopping around for car insurance, it’s easy to assume that the more basic the cover, the lower the premium you’ll pay. But insurance is a funny old beast, and seemingly obvious logic doesn’t always apply. Read on to find out why, and the pros and cons of comprehensive versus third party car insurance.
Comprehensive cover is the gold standard of car insurance. As the name suggests, it offers the highest level of cover available, giving you the confidence that your insurer will pay out for (almost) any damage to or theft of your car, plus any harm you cause to other people or their property.
There are 2 lower levels of cover available: third party, fire and theft and, the most basic level, third party.
Comprehensive car insurance covers, at a minimum:
With comprehensive car insurance policies, you often get extra benefits thrown in as part of the deal. These may include windscreen repair, the use of a courtesy car if yours is out of action and getting repairs, or (in some cases) the ability to drive other people’s cars on a third-party basis.
Comprehensive car insurance is good, but it’s not perfect. Exclusions to be aware of that are common to most comprehensive policies include:
And bear in mind that some comprehensive policies are more, well, comprehensive than others. For example, some will include things like breakdown cover, legal cover or the ability to drive other cars as standard. With others, these may be optional add-ons that cost extra.
Third party car insurance is the minimum level of cover you need to legally hit the road. It’s the most basic of the 3 levels of cover (after comprehensive and third party, fire and theft).
Say you hit another car, or you veer off the road to avoid a kamikaze cat and plough into someone’s house. This insurance will cover any damage you cause to other people’s vehicles and property. After all, it would be pretty unfair if someone had to claim on their own insurance if they’d been minding their own business when you crashed into them.
Third party insurance will also cover applicable medical costs for any third parties, plus any passengers in your car, should they get injured.
Here’s the kicker: Any damage to your vehicle will not be covered by third party insurance.
All of the general exclusions that apply to comprehensive cover will also apply to third party insurance, and you’ll be much less likely to have any extra benefits thrown in as standard.
| Cover | Comprehensive | Third Party |
|---|---|---|
| Legal requirement |
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| At-fault damage to other vehicles |
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| At-fault damage to own vehicle |
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|
| Not-at-fault damage to own vehicle |
|
|
| Fire damage |
|
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| Theft |
|
|
| Injury to third parties |
|
|
| Car contents |
|
|
| Courtesy car |
|
|
| Windscreen cover |
|
|
* If you are involved in an accident that was not your fault, the at-fault driver’s insurer will pay compensation directly to you. However, your insurer will not help when making a claim. **Availability and level of cover varies depending on provider.
There is no hard and fast rule here – it really depends. In theory, third party insurance should be cheaper. After all, you’re getting less protection.
However, while logically this means you should pay less for third party cover, this is not always the case. Some people may find that comprehensive cover is just as cheap, if not cheaper, than buying third party cover for the same car. So never go straight for third party cover without checking all your options.
In the past, things worked as you would expect: The most basic level of cover (third party) was also the cheapest.
Over recent years, insurance companies have cottoned on that young drivers (or those with poor records) were the ones mainly taking out third party insurance in a bid to keep costs down. Youngsters are more likely to have an accident and make the insurer pay out. The stats don’t lie.
Even if an insurer only has to pay for a third party’s costs, that can still be pretty expensive. So, in response to the fact that high-risk customers are more likely to take out lower-protection policies, some insurers raised the premium costs for drivers taking out third party or third party, fire and theft cover. This has led to a somewhat bizarre situation, with comprehensive insurance sometimes working out as cheaper.
It’s not always the case, though. Particularly if you fall into a lower-risk category – say you’re a driver in your forties or fifties with a good claims history – comprehensive cover may be the most expensive option. It’ll still be a lot cheaper than any level of cover for high-risk drivers, though.
What this all boils down to is that you need to really compare all your car insurance options carefully. You may find you can get the top level of protection at a competitive price.
To see if opting for third party cover could save us money, we used a price comparison site to get car insurance quotes for a teacher living in Bristol, with a clean driving record and 5 years without claims. Our teacher drives a Peugeot 208 to and from school every day.
We also adjusted our teacher’s age to see if this made a difference in what they were offered.
Not only did comprehensive cover prove cheaper, based on the top 5 quotes, for both ages, but we were offered a greater choice of providers when we opted for comprehensive cover.
Yes, there is a middle ground between third party and comprehensive cover: third party, fire and theft insurance. As with third party insurance, you’ll be covered if you cause damage or injury to someone else, their car, or their property. It also pays out if your car is stolen or damaged by fire.
You still won’t be covered for damage to your car following an accident you caused. For that, you need comprehensive insurance.
Ultimately, it’s up to you. Your age and driving experience, the car you drive, where you live and many other factors will all play a part.
But you certainly shouldn’t make a decision without checking all your options. If you assume you’ll be better off with third party insurance and don’t even bother getting a comprehensive quote, you could end up paying more for a lower level of cover.
Some factors that influence your premiums, such as age, are outside of your control. But regardless of the level of cover you choose, there are plenty of tactics you can use to cut the cost of car insurance. Here are just a few:
Third party insurance is a much more basic level of cover than comprehensive car insurance. It will only cover harm you cause to other people, cars or property, and won’t pay out for any damage to your own car or any medical costs you incur. But contrary to what you might expect, it isn’t always cheaper than comprehensive cover. So don’t automatically choose the third party option when getting a car insurance quote in a bid to save money. In some cases, you’ll get more for less with comprehensive cover.
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