Insurance is one of the most important – and potentially expensive – factors that drivers must make a decision about each year. This is especially true for new drivers, for whom insurance will typically be more expensive, and who might be more likely to actually have to make a claim.
Deciding on what type of insurance to go for and choosing which of the many insurers to buy a policy from can be daunting or confusing, particularly the first time. Learner drivers may come across terms that they have never heard of before, or at least not fully understand the meaning and implications of. ‘Comprehensive’, ‘third party’, and ‘third party fire and theft’, as the three main types of insurance cover, are an important example of concepts that may be unfamiliar to first-time drivers. However, it is a categorisation that is very important to understand as they have very distinct meanings within the world of car insurance – and significant implications in terms of both the price (or the insurance ‘premium’) and what is/isn’t covered by your policy.
To clarify this, and to help you decide what type of insurance is best for you, we’ll outline what each of these are – and help you understand the implications of choosing one over another.
The 3 main types of insurance cover
Most insurance providers will offer the option of choosing between 3 different types of cover. These are:
- Third party
- Third party, fire and theft (TPFT)
Many insurers, however, no longer provide Third party only cover, meaning TPFT is the minimum level of cover they will offer to provide you with. This article will therefore examine the major pros and cons of Comprehensive and TPFT and Comprehensive cover, to help you compare these two options and decide which is right for you.
Third party, fire and theft
TPFT is the lowest level of cover many insurance companies offer (unless you’ve been able to find a provider offering Third party only cover). Third party cover is the basic level of cover you need in order to be legally allowed to drive in the UK. Often it is also the cheapest. Should you be involved in an accident, your insurance policy provider will cover the losses incurred by any third-party vehicles or property affected by your accident. However, any damage to your own car will not be covered by such policies – meaning you will have to come up with the entire amount of money it may costs to fix it. Under a TPFT policy, you will also be covered if your vehicle is involved in an incident with fire or if it is stolen.
This type of insurance cover is one of the highest levels of coverage you can get for your vehicle. Comprehensive policies incorporate all of the coverage of TPFT but also include additional coverage, paying out for damage suffered to your own vehicle should you make a claim. This applies even if you were the one at fault for the accident. This type of cover is also known as ‘fully comprehensive’, and you may hear people refer to it as “fully comp”.
Comprehensive cover is always more expensive – right?
Not necessarily. You’d be forgiven for thinking that all comprehensive insurance policies are always more expensive than getting TPFT cover. However, this is not always the case. Insurance companies may set a lower price a comprehensive policy, as they may consider you a more ‘responsible’ driver for choosing the higher coverage level! So remember: it is worth always checking the price of each of the different coverage types. The additional protection offered may work out cheaper than you thought!
Even if comprehensive cover is more expensive though, it is usually still worth serious consideration for most new drivers. Just think: in the event of an accident, would you definitely be able to afford to properly repair – or potentially even have to replace – your car by yourself? If not, then it might be worth spending a little extra money on your insurance premium in order to benefit from wider coverage and greater pay-outs if and when you need to make a claim.
Alternative ways of saving money on your car insurance
Your choice of coverage level obviously can determine the premium you pay for your car insurance policy. However, there are many more factors that can affect the price. One typical method of getting a much lower premium is to go for a ‘black box’ insurance policy. This is a particularly effective choice for young/new drivers aiming to keep their cost of insurance as low as possible, especially when their details might otherwise cause car insurance quotes to be very high relative to other drivers.
Black box insurance – otherwise known as a ‘telematics’ policy – essentially works to lower your premium by assuring your insurance company that you are a safe driver. This is achieved by fitting a small phone-sized device (the black box) to your car. The box then records your speed, distances travelled, and the time of day that you are on the road. It additionally assesses your driving style, by monitoring movements such as cornering and braking – helping you ‘prove’ that you are driving safely.
Of course another way of ensuring that you are paying the lowest possible premiums for the type of coverage you want is to research the details of policies offered by different insurers and use price comparison websites. The optimum provider/insurance type for you may change over time.
We will be including special deals and offers by different insurance providers on this blog from time to time too, in addition to compiling a comprehensive list of recommended insurers within the ‘Resources’ section of this website – so stay tuned.