If you own a car in the UK you are going to need car insurance. Determining the type and where to obtain it, however, is your choice. So what is the difference between different types of car insurance and what do you need to consider when trying to decide which type is ideal for your situation?
There are three different types of car insurance in the UK; third party insurance, third party (fire and theft) insurance, and comprehensive insurance. Third party insurance is just that, it covers damage caused to the other vehicle(s) but not your own. This may be an attractive policy should you own a cheap vehicle that is easily replaceable or live in a high crime area. You may also consider this type of insurance because it seems like it should be the cheapest, this is not always the case. Sometimes third party insurance can be just as expensive as comprehensive and you get a lot more value with comprehensive. Third party fire and theft insurance is mostly the same as third party insurance but it will cover your car should there be damage or need of vehicle replacement caused by theft or fire. Comprehensive insurance will cover the damage to other vehicles like third party but will also cover damage, repairs or replacement of your vehicle, even if an accident is your fault. Comprehensive insurance also covers you for vandalism and sometimes even covers you to drive others’ vehicles (but only third party coverage for this). Make sure you acquire different quotes from different companies to ensure you are getting the best value for your money and getting the option that works best for you.
Policies may seem almost the same in price and content, until you check the fine print and see the extras that may or may not be available with certain policies. Some companies may have mileage stipulations, when asked about the average mileage you use, be honest, lack of honesty in this regard could cause your insurance company to payout less for a claim if they find out your average mileage is higher than what you reported. Different companies also have different excess amounts, which is the claim amount not covered by your insurance. Sometimes you can opt to pay more excess in order to lower your premiums. Claims can raise your premiums, but you can also receive a no-claims bonus that reduces your premiums the longer you go without a claim. This aside, make sure you always report accidents to your insurance company even if you are not making a claim.
All providers are not made equal, making sure that you check the fine print and the extras on your policy is a must. Make sure your insurance provider is FCA (Financial Conduct Authority) approved, this proves that they are working within the appropriate laws and obligations for their customers. When deciding your excess and premiums companies will take into consideration your age, driving experience and type of vehicle being driven. If you are a first time driver with little experience expect to pay more than someone with more experience and no claims. Extras can include comprehensive coverage throughout all EU countries, rental vehicle (should your vehicle need repair after an accident, theft or fire), windshield damage, personal belongings coverage and coverage for dependents such as when your children start driving. Another thing to note is that by law an insurance company must cover you when driving in all EU countries but only for third party coverage, not comprehensive.
Do your research and make sure your policy covers you for what is important to you and for the right price.