Comprehensive vs. Third-Party Insurance: Understanding Coverage in the Event of Theft

To legally drive a car in the UK, you must have car insurance. However, there are different types and levels of cover, with varying costs, so you need to be aware of what they are, and which is most suitable for you. Essentially, there are three types of cover, and each has different features.

Third Party Cover

This type of insurance has two variants:

  • Third party only, which is the most basic cover available. If you are involved in an accident that is your fault, the policy will cover injuries to other people as well as damage to their vehicle and property. It will not, however, cover any damage to your own vehicle or the cost of any medical treatment you need. You will also not be covered if your vehicle is stolen or damaged by fire.
  • Third party fire and theft has the same cover as third party only but also covers you should your car be damaged by fire or stolen. Certain policies also cover sat nav and car entertainment systems.

Third party has traditionally been the cheapest form of car insurance because it provides the most basic level of coverage. However, it is often chosen by young and higher-risk drivers to save money. Insurers are aware of this and know that these drivers tend to claim more frequently and for larger amounts. Consequently, prices will be higher than for more experienced drivers.

Comprehensive Cover

This is the best level of insurance since it provides everything available under third party, fire and theft, and more. You are also covered for damage to your own vehicle as well as medical treatment for injuries you sustain when the accident is your fault.

You will normally be covered if you can’t prove who caused the accident, aren’t aware who damaged your car or an uninsured driver was involved, although this can affect future premiums. Some comprehensive policies allow you to drive cars you don’t own although may only provide third-party cover. You need to check your policy before driving other cars.

Which is Best for You?

Comprehensive cover, as the name suggests, is the best type of cover but also the most expensive. There is always the temptation to choose third-party cover to save on the initial cost, but this can be more expensive in the long term if you have to repair or replace your car. However, it’s certainly worth considering if you own an old car where the cost of having it repaired is likely to exceed the value of the car.

It’s always advisable to compare policies and options, including the cover they provide, before choosing the best one for you. Always consider whether you can afford to pay the costs that aren’t covered and the consequences of not being able to pay.

You can reduce costs by shopping around using comparison sites and comparing features as well as cost. You will also get cheaper car insurance if you have a claim-free history over a number of years, which means you will have a good level of no-claims discount. Young and inexperienced drivers in particular can help their cause by choosing telematics or ‘black box’ policies, where driving habits are monitored, and safe driving is encouraged. This feature is mostly available on comprehensive policies although some third-party policies provide it.

You can also reduce costs by increasing the excess you pay, driving fewer miles and having fewer or more experienced drivers on the policy. There are many ways to reduce costs but having inadequate cover shouldn’t be one of them.