What does ‘third party’ and ‘comprehensive’ car insurance actually mean?

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Car insurance is a legal requirement and if you are caught without it, you will be given a fixed penalty fine and receive penalty points on your license. You also face the risk of having your vehicle clamped, seized and disposed of!

There are three basic policy types:

  • third party
  • third party, fire and theft
  • fully comprehensive

The type of car insurance policy you have is your choice, but you should take a look at the advantages and disadvantages of each before making your decision.

What is ‘third party’ car insurance?

Third party car insurance (third party only) is the most basic policy type and is the minimum level of cover required by law, to make sure third parties involved in any accidents are covered.

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As the name suggests, third party insurance will only cover any third parties involved in a car accident which is the fault of the policy holder.

What is covered?

You are driving along and accidentally crash into the back of the car in front of you. In this example, your third party insurance policy will generally cover the following:

  • Injuries to the driver of the vehicle you crashed into (the third party)
  • Damage to the vehicle you crashed into
  • Injuries to passengers in either car
  • Damage to property of third party
  • The third party’s policy excess

What is not covered?

Using the scenario above, the following will not be covered by your third party insurance:

  • Damage to your car
  • Injuries to yourself

In addition to this, you are not covered for fire and theft on third party insurance policies. To be covered for these, you can purchase ‘third party, fire and theft’ insurance.

This policy type covers you for everything ‘third party only’ does, but includes fire and theft to your vehicle.

Advantages and disadvantages to third party insurance

A major disadvantage to having third party car insurance is that you are not covered for any damage to your vehicle in an accident where you are to blame.

This means that you will have to pay for any repairs to your vehicle out of your own pocket.

However, if the value of your car is low, having third party insurance could be an advantage as the cost of your excess could be more than the cost of any repairs needed.

Another drawback to this type of insurance is that it is not necessarily cheaper than other policy types. The reason being that it has seen a rise in popularity, especially with new and young drivers. Because of this, a third party insurance policy may not offer great value.

For example, your premium may be the same amount as fully comprehensive cover, but you get a lot less protection.

What is comprehensive car insurance?

Comprehensive insurance, often called fully comprehensive insurance, provides you with the highest level of cover.

With this type of insurance, you are covered for any damage or injury if an accident was not your fault. You are also covered for any damage to you vehicle if an accident was your fault, unlike third party insurance.

What is covered?

With fully comprehensive cover you are generally covered for the following, whether the accident is your fault or not:

  • Damage to your vehicle
  • Damage to third party’s vehicle
  • Injuries to the driver of the vehicle
  • Injuries to any passengers in either car
  • Malicious damage to your vehicle
  • Accidental damage to your vehicle
  • Fire and theft to your vehicle

Exclusions

Not all fully comprehensive policies are the same. For example, some insurers will offer windscreen cover as standard on their policies, while others will not.

You should always check the policy wording and schedule to be aware of any exclusions and avoid being caught out.

For example, some insurance companies will not cover you for malicious damage to your vehicle if it was not parked in a garage or driveway.

Advantages and disadvantages to fully comprehensive insurance

The main advantage to fully comprehensive car insurance is that you can claim from your insurer for accidents that were not your fault or for when the fault cannot be proven. This gives you peace of mind that you will not lose out financially should anything happen on the roads.

Another advantage to this type of cover is that you are sometimes able to drive a vehicle which isn’t registered to you and receive third party cover. This means, you could use a friend or family member’s car and be insured.

However, this does not come as standard on all fully comprehensive policies, so you should check if this is included before doing so. You will also find that if you are under 25 years old, you are not permitted to drive others’ cars and cover is third party only.

A disadvantage to fully comprehensive cover is that it is usually the most expensive. But if you were to weigh up how much cover you get compared to other policies (third party only and fire and theft), you may find it is worth it.

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