If you've got a car, you're going to need a car insurance policy. It's a legal requirement and if you're caught driving without insurance, it's six points on your licence and a fine of £300 or even higher if the case comes to court.
However, wading through the jargon to understand what cover is best for you can feel daunting. So here's a guide to help, along with a few tips.
Levels of car cover
There are three main levels of motor insurance cover. Third-party only, third-party fire and theft, and comprehensive.
Third party (sometimes called 'third party only' or TPO)
Third party is the minimum insurance you need to drive legally. It covers legal liability to pay damages to someone else (a 'third party') for injury to them, their passengers and their property. If it's your car that's damaged or stolen, you'll have to foot the bill for repairs or a replacement yourself, and it doesn't pay out for medical expenses if you're injured.
Third party fire and theft ( sometimes called TPFT)
This gives the above cover. But the difference is that if your car is stolen or damaged by fire it will cover repairs or a replacement.
This is the broadest level of car insurance available. It covers your liability to a third party, fire and theft. It also covers damage to your vehicle and a level of personal injury cover for you. If the accident wasn't your fault, your insurer will attempt to recover the costs from the other party's insurer. If the accident was your fault, the costs will be covered by your insurance, though you'll still have to pay the voluntary and compulsory excess yourself.
Fully comprehensive insurance can offer a range of other benefits such as windscreen cover or cover for personal belongings. Some fully comprehensive policies have a clause meaning you can legally drive other people's cars if you have their permission, though sometimes this is only under certain conditions, such as in an emergency. You’ll also find whilst driving another person’s car, your cover will only be third party, rather than fully comprehensive.
When it comes to the additional benefits of comprehensive cover don't make assumptions, check out exactly what's included in the policy.
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Read the small print
Bear in mind individual car insurance policies vary, so always take time to scour the terms and conditions before you buy.
Don't assume that lower levels of cover such as 'third party' will be cheaper than 'fully comprehensive'. It might seem a bit quirky, but that's not necessarily the case. Check out the different options.
When it comes to choosing your policy don't just choose the cheapest option on autopilot. Think about what level of cover would give you peace of mind if disaster strikes and go for that.