It is
mandatory in the UK that all drivers are insured. Insurance is one of the most
important things drivers must make a decision about – and something that needs
to be renewed (and reviewed) each year.
It is also often potentially one of the most expensive things a driver will purchase:
in terms of both price and the potential costs further down the line if they
make the wrong choice or make a mistake.
This is especially the case for new drivers. Also, car insurance will generally
speaking be more expensive for them (as they are typically more likely to
actually have to make a claim). Additionally, they will naturally have the
least experience in terms of the different road insurance options out there and
may be unfamiliar with some of the terminology, or not fully understand its
meaning or implications.
This can all make deciding on the exact type of car insurance to go for – and choosing which of the many unfamiliar insurers to go through – confusing or intimidating, especially the first time.
So, let this quick guide be your saviour!
The three main types of insurance cover are: ‘Comprehensive’, ‘Third Party’, and ‘Third Party Fire and Theft’. This categorisation is very important to understand as each type has a very specific meanings in the context of car insurance – with significant implications for both price (i.e. the insurance ‘premium’) and precisely what is and isn’t covered by the given policy.
To help
you decide which class of insurance is best for you, see below for an outline
of each type are – and the implications of choosing one rather than another.
Generally, you have the choic of 3 main types of insurance cover
Most companies that offer car insurance offer you the choice between these three different types of cover:
- Third Party (or “Third Party only”)
- Third Party, Fire & Theft (“TPFT”)
- Comprehensive (or “fully comprehensive”)
However, many insurance providers have ceased to offer Third Party Only cover, and TPFT is the minimum level of cover they will actually offer to provide. So let’s take a look at the main pros and cons of TPFT and Comprehensive cover, to help you compare the two and decide which option would be best for you.
Third Party, Fire and Theft
Third Party
Only is the minimum level of cover you need in order to be legally allowed to
drive in the UK. It is usually also the cheapest. If you’re involved in a road
accident, the insurance policy provider covers any losses incurred by any
third-party vehicles or property affected by the accident. However, any damage
to your own vehicle is not covered by basic Third Party Only policies. This
means you would need to pay the entire cost of fixing any damage to your car after
an accident.
Under a TPFT policy, however, you will additionally be covered for costs when
your vehicle is damaged by an incident involving fire or if it is stolen. In
practice, TPFT is the lowest level of cover many insurance companies now offer.
Comprehensive cover
This type of insurance policy provides the highest levels of coverage you can get for your car. Comprehensive policies incorporate all of the coverage provided by TPFT insurance – but also include additional coverage: the insurer will pay out for damages to your own vehicle if you make a claim. This even applies in cases where you are the party at fault for the accident. You may hear this type of cover referred to as “Fully Comprehensive” or “fully comp”.
Are Comprehensive policies always more expensive?
This is not necessarily always the case. Insurance providers may actually quote you a lower price for a comprehensive policy, as they may consider you a more ‘responsible’ driver for choosing the higher coverage level! So remember: it is always worth checking the price of each of the different coverage types provided by each insurer against each other! The additional protection (and peace of mind) of a fully comp policy may turn out to be cheaper than you expected!
However, even if a comprehensive policy is more expensive, they are still worth serious consideration for new drivers: in the event of an accident, you might not be able to afford to properly repair (or potentially even replace, if necessary) your car on your own! So it may be worth spending extra now on your insurance premium in order to benefit from wider coverage – and greater pay-outs – if and when you need to make a claim in the future.
Other ways of saving money on car insurance
Coverage level is clearly one factor in the total premium you will pay for your car insurance. However, there are many other issues that can affect the price, including what stage of your driving ‘career’ you are at (learner vs recently qualified for example), what vehicle (or range of vehicles) you want to be insured to drive (all vehicles, your parent’s car, your own car etc), the power of that car, and more.
Particular types of car insurance which might save you a lot of money as a young driver include:
- Learner Driver insurance
- Named Young Driver Insurance (parents car)
- Pay As You Go Insurance (parents car)
- Student Driver insurance
- Black Box insurance (own car)
A popular method of receiving much lower insurance premium quotes is to opt for a ‘black box’ insurance policy. This is a particularly effective choice for new drivers (and young drivers in general) wanting to keep insurance costs to a minimum, especially when their personal details would otherwise lead to very high quotes relative to other (older, more experienced etc) drivers.
Black box (also referred to as ‘telematics’) policies work to lower your premium by assuring the insurance provider company that you are actually a safe driver, relative to the average road user with similar details. This is done by fitting a small device (the ‘black box’) to your car. The device records your speeds, distances travelled, and the journey lengths and times of day when you are on the road. It also assesses your ‘driving style’, by monitoring the movements your vehicle makes (e.g. braking and cornering and braking). The idea being that this helps you ‘prove’ to the insurer that you typically driving safely.
A further way to ensure you pay the lowest premiums possible for a given coverage level is by researching details of the various different policies offered by multiple insurance companies (and by using price comparison sites to assist in this).
Another way to potentially save a LOT of money as a new/young driver is to take advantage of deals for cars aimed at young drivers, or periodic special deals on new vehicles offered by companies such as insurers, when looking for your next car.
Finally, remember that the optimum coverage level/policy type and insurance company for you will likely change over time, especially when you change the vehicle you’ll be driving.
So, always reconsider (and check the market again) when your car insurance is up for renewal. Typically policies are annual, and you will be sent, or need to request, a new quote each year.
