Comprehensive vs third party car insurance

Trying to choose your level of cover? Here's a breakdown of comprehensive and third party car insurance, and which one might be best for you.

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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.

What is comprehensive 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.

What does comprehensive car insurance cover?

Comprehensive car insurance covers, at a minimum:

  • Damage to your own car following an accident or collision
  • Injury to other people and damage to their vehicles and property following an accident or collision that was your fault
  • Theft of your car
  • Vandalism or malicious damage to your car
  • Damage to or destruction of your car due to fire
  • Flood, hail or storm damage (an “act of God” or unavoidable damage)

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.

What doesn’t comprehensive car insurance cover?

Comprehensive car insurance is good, but it’s not perfect. Exclusions to be aware of that are common to most comprehensive policies include:

  • Wear and tear. You won’t usually be able to claim for damage that happens gradually over time, such as rust or worn brake pads.
  • Negligence or carelessness. If your belongings are stolen from a car you’ve forgotten to lock, you won’t be able to claim.
  • Driving under the influence. If you cause an accident after drink or drug driving, you won’t be able to claim.
  • Car modifications. If you don’t inform your insurer about any modifications made to your car, any future claims could be rejected.
  • Driving a car that isn’t roadworthy. Failure to keep your car in good nick – for example, not replacing worn tyres or broken lights – could render your insurance invalid.
  • Driving without a licence. You won’t be able to claim if you don’t have a valid licence when you get behind the wheel of your car.
  • Allowing others to drive your car. Unless someone is specifically named on your policy or has their own insurance for your car, your comprehensive policy won’t cover them.
  • Using your car for business purposes. For anything other than your regular commute, you’re likely to need business car insurance.
  • Motor sports or race days. If you feel the need for speed, you’ll need specialist insurance for this.

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.

What is third party car insurance?

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).

What does third party car insurance cover?

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.

What doesn’t third party car insurance cover?

Here’s the kicker: Any damage to your vehicle will not be covered by third party insurance.

  • If your car is dented or even trashed following an accident that was your fault, unfortunately, you’re going to have to foot the bill.
  • If you’re hurt in the collision and need to pay for any medical costs – for example, physiotherapy – this will come out of your pocket too.
  • You won’t be covered if your car or its contents are stolen or damaged due to fire or extreme weather.

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.

What are the key differences between comprehensive and third party cover?

CoverComprehensiveThird Party
Legal requirement
  • No
  • Yes
At-fault damage to other vehicles
  • Yes
  • Yes
At-fault damage to own vehicle
  • Yes
  • No
Not-at-fault damage to own vehicle
  • Yes
  • Limited*
Fire damage
  • Yes
  • No
Theft
  • Yes
  • No
Injury to third parties
  • Yes
  • Yes
Car contents
  • Yes**
  • No
Courtesy car
  • Yes**
  • No
Windscreen cover
  • Yes**
  • No

* 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.

Which is cheaper: comprehensive or third party cover?

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.

Why is comprehensive cover often cheaper?

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.

Example: Comprehensive vs third party quotes

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.

Comprehensive cover

  • 25-year-old, top 5 quote range: £651-£758
  • 40-year-old, top 5 quote range: £509-£563

      Third party cover

      • 25-year-old, top 5 quote range: £726-£900
      • 40-year-old, top 5 quote range: £595-£670

      Are there any other levels of 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.

      What level of car insurance cover should I choose?

      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.

      How can I save on my car insurance?

      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:

      • Shop around. Different insurers will assess risks differently and tailor their quotes accordingly. Even if a specific car insurer has been a great choice for years, it doesn’t mean they will always be. Always compare car insurance when it’s time to renew.
      • Up your security. Either on the car itself – for example, by fitting an alarm – or by parking your car in a more secure spot.
      • Pay annually. If you can afford it, this will usually be cheaper than paying monthly, which will incur extra interest charges.
      • Increase the voluntary excess. A higher excess usually results in a lower premium, and vice versa. Just make sure it’s not set so high that you can’t afford it in the event of a claim.
      • Consider “black box” insurance. Officially known as telematics insurance, this tracks your driving habits and rewards safe, careful drivers (but watch out, it might penalise less careful driving).

      Pros and cons of comprehensive insurance

      Pros

      • Your own car is covered if you cause an accident.
      • Many policies cover your own medical costs following an accident.
      • Get protected against theft plus fire and weather damage.

      Cons

      • Sometimes, though not always, it’s more expensive than third party cover.
      • There are some exclusions, such as using your car for business purposes.

      Pros and cons of third party insurance

      Pros

      • It may be cheaper than comprehensive cover, though not always.
      • May be the most cost-effective option for an old banger that’s cheap to repair.
      • Covers injury to third parties and damage to their vehicles and property.

      Cons

      • Much more limited cover than comprehensive insurance.
      • Risk having to fork out thousands for repairs to your own car following a crash.
      • No personal cover for medical costs following an accident.
      • Unlikely to offer support in claiming costs if another driver is at fault in an accident.

      Bottom line

      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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