Types of car insurance
Fully comprehensive and third-party cover explained
Every driver must have a valid car insurance policy for the car they're driving – that part's clear. Yet there are three main types of car insurance to choose from, which can complicate your decision. This short guide explains the differences so you can decide which is best for you.
What are the different types of car insurance?
Car insurance is a legal requirement, so all drivers must have a policy in place. Yet the type of car insurance you opt for is down to you.
There are many factors that will affect how much you pay for your policy, and our full guide to cheap car insurance covers them in more detail. But if you're looking for a quick guide that explains the three main types of car insurance then read on – we've summarised them below...
Reason to claim | Third party | Third party, fire and theft | Fully comprehensive |
You cause damage to another person's car or property |
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You injure another person |
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Your car is damaged due to fire |
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Your car is stolen |
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Your car is damaged by an accident you caused |
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You're injured by an accident you caused |
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Third-party insurance
Third party insurance is the most basic level of cover. You'll be covered for the cost of repairs to damage to another person's vehicle or property (the 'third party'), plus any medical bills or injury compensation costs if someone was hurt in the accident. However, you won't be able to claim for any repairs to, or the replacement of, your own car – or for any injury caused to yourself.
Third-party, fire and theft insurance
Third-party, fire and theft provides mid-level cover – more than third-party only, less than fully comprehensive. It includes the third-party cover that's mentioned above, plus...
You'll be covered for the cost of repairing or replacing your car if it's damaged by fire, as well as the cost of replacing your car if it's stolen and can't be recovered, including the cost of repairing damage to your car after an attempted theft.
Some policies will also cover the cost of certain personal belongings being stolen or damaged (for example, a radio or sat-nav). Read more about third-party, fire and theft insurance.
If you have a third party, fire and theft policy, your insurance provider WON'T pay out if your car is damaged in an accident. However, if you're in an accident that is someone else's fault, their insurance should cover the cost of repairs.
You also won't be covered for the following:
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Damage to your personal possessions in a crash
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Repair or replacement costs following 'theft due to carelessness' (for example, if the car is left unlocked)
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Medical costs if you're injured in an accident
What's not covered?
Fully comprehensive insurance
Comprehensive cover, as the name suggests, is the most 'comprehensive' type of insurance you can get. You get third-party, fire and theft cover as above, plus if you caused an accident you can claim for costs of repair or replacing your car. Most comprehensive insurance policies cover:
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The full cost of repairing damage to your car after an accident (regardless of who's at fault)
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Damage to other cars
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Fire or flood damage to your car
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Theft of your car
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Injury to other people
Read more about fully comprehensive insurance.
The name 'fully comprehensive' is slightly misleading, as no insurance policy can cover every scenario. As a general rule, even comprehensive policies are unlikely to cover you for:
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Theft due to carelessness (for example, if the car was left unlocked)
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Any damage or injury caused when driving under the influence of drink or drugs
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Driving with an invalid licence
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General wear and tear
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Driving someone else's car (some insurers will allow you to do this as standard, so check policies if you do want this)
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Someone uninsured driving your car
What's not covered?
What other types of car insurance are there?
Beyond the three standard types of car insurance, there are several others which cover more specific vehicles or drivers:
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Multi-car insurance – if you've more than one car in your household, it can be more cost-efficient to insure them all under one policy.
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Classic car insurance – cover for vintage cars, driven rarely and kept in a secure garage or lock-up.
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Temporary car insurance – a good option to cover yourself as a one-off (if you're driving a family member's car, for example).
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Telematic or 'black box' insurance – some providers offer cheaper policies based on driving data collected by a device installed in your car. It can bring down the costs for young drivers.
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Track day insurance – cover for driving your own car at a racing experience day, which isn't usually covered by standard policies.
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Pay-as-you-go cover – rolling contracts based on how many miles you've driven, for if you know you won't be setting out very often or very far.
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Business car insurance – cover if you drive your own vehicle for your job.
What add-ons can you get on your car insurance policy?
It's often possible to get extras on any type of car insurance to cover all sorts of eventualities. The most common extras include:
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Breakdown cover. Assistance if your car breaks down – our guide has full info.
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Personal accident cover. Gives compensation for serious injuries or death.
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Motor legal expenses cover. Covers legal costs for accidents which aren't your fault.
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Courtesy car cover. A temporary car you can drive while yours is being repaired.
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Windscreen cover. Covers the cost of replacing damaged windscreens.
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Replacement key cover. Covers the cost of replacing lost of stolen keys.
Unfortunately, working out whether its cheaper to bundle these add-ons together or go separate can be tricky. You may also find you can group certain things in various combinations, like getting key replacement cover as an add-on to a separate breakdown policy, or even getting your breakdown cover through a packaged bank account.
While the convenience of lumping everything together into one big policy may be alluring, the savings you could make after a bit of research could be lucrative – so shop around!
Want to know when the cheapest time to get car insurance is? The MSE App has a new tool called Bill Buster – give us a few details about your insurance policy and we'll track it, alert you when it's ending and when you should start gathering quotes to save.
What's the cheapest type of car insurance policy?
This isn't an easy question to answer, as there's no one-size-fits-all rule. The cost of car insurance is calculated by each insurer based on many factors, all to work out how much of a risk it thinks you are.
You might expect third-party insurance to work out the cheapest (as it offers the lowest level of cover) – but car insurance isn't always that straightforward. In fact, choosing fully comprehensive insurance can be seen by certain insurers as the more responsible, lower-risk option, so it's often cheaper than opting for third-party.
The only way to know what you'll get for sure is to use trial and error when getting quotes: get a quote for third-party, then third-party, fire and theft and finally fully comprehensive. You can then see which is cheapest and which level suits you the best.
All policies have an excess you'll need to pay
When buying a policy, you'll need to select the amount you'd be willing to contribute in the event of a claim – known as the voluntary excess. For example, if you set your excess as £400 and your car was later damaged in an accident and a garage had quoted £1,500 to repair it, you'd pay the first £400 with your insurer covering the rest.
Choosing a high voluntary excess will usually mean cheaper prices, as it could indicate that you're someone who is less likely to claim (or if you do then the insurer has less to pay).
However, remember that if you do need to claim, you'll need to be able to come up with the cash to pay it. It's also worth noting that some insurers have compulsory excesses in addition to the voluntary one you've set. So using the example above, a policy with a £250 compulsory excess plus a £400 voluntary excess would set you back £650 per claim (if your claim is for a lower amount than that you'll be better off paying the bill yourself).
What affects the cost of different types of car insurance?
Car insurance firms use various criteria to determine how much they'll quote for your policy. Their estimation of risk will be based on a number of factors, but significantly age, experience and driving history are key. Here are just some of the most common factors that insurers use:
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Your age. It's usually more costly for newer and younger drivers, as they present more risk.
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Your address. If you live in an area where lots of accidents occur you will likely pay more compared to if you lived in quieter streets.
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Your driving history and mileage. You'll probably pay less if you've been driving for many years, or if you don't travel very far or use your car very often.
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How fast or expensive your car is. Insurers can assume that if your car can go fast then you will
drive it fast. And if it's flash and new, it'll cost more to repair or replace.
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How many accidents you've had before. Recent claims indicate to insurers that you may be more likely than others to have another accident in the future.
How to get cheap car insurance
We've a whole host of car insurance top tips and tricks to get cheap cover. Below is a quick round-up of where we'd suggest you head to next to get a policy...
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Benchmark your cheapest using our Car Insurance Compare+ tool, with personalised cost-cutting tips.
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Read our full Cheap car insurance guide, including nine ways to cut car insurance costs.
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See our full Car insurance section with all our key tools and guides.
Who's this guide for? Anyone wanting to learn about the different types of car insurance.
Not what you want? If you're looking for more specific cover, or want to know how to make a claim...
Making a claim on your car insurance | Provisional drivers' insurance | Cheap classic car insurance | Buying a car
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