Types of car insurance

There are two different types of vehicle cover that are standard in the UK. As all drivers know car insurance is compulsory in the United Kingdom and everyone must have a sufficient level of cover. This is the only sensible method to have, as without insurance whenever accidents occurred there would be anarchy with much confusion on who should pay for damages.

Two standard car Insurance types are as follows:

Third party – this type of car insurance is the very minimum you must have to be allowed out on the roads in your vehicle. It basically covers your liability to others only if a claim is made against you and your car. For example if Bob is driving a Toyota and makes a mistake at a junction, pulling out at the wrong time. Another vehicle driven by Karen hits him. It was Bobs’ fault the accident happened and therefore he has liability for Karen’s claim. She claims against Bob’s car insurance company for the damages made to her car. The claim is successful and she gets her Mazda repaired no problem. However Bob cannot make a claim with the car insurance company in order to get the dent is his Toyota repaired. He has third party only insurance covering damage to other peoples vehicles etc, but not his own. Bob therefore pays for the repairs from his own finances, rather than under payout from his insurer.

Third party insurance, depending on the level of cover your insurer provides, should enable you to also drive other peoples cars (however the level of cover will remain the same). This can be very useful if say you have a two seater car, but need a bigger vehicle for a once off and wish to borrow a friends. This is just an example as there are many other instances where this type of cover under your insurance can be useful. However you should not assume adequate coverage for this use and always check your policy documentation first.

Another type of cover which you can obtain quotes for is third party fire and theft. This incorporates the features, as the name tells you, of third party cover but also insures against other standard perils that can be quite common. More can be explained in our ‘third party fire and theft’ article.

The basic minimum level of cover you can have is third-party only insurance, covering other people for claims made against you. However you will not be able to receive compensation for other ‘perils’ which can affect UK car owners which can be very common. For this you will need an enhanced level of cover such as third part fire and theft.

Clearly your car is investment which can often cost quite a substantial amount of money. In addition to their initial outlay it takes further commitment to keep the car running and pay various taxes etc, all of which add up to a significant amount. Because of this many people believe it is wise to insure your car against various negative occurances that can happen. Under enhanced car insurance cover you can claim in a range of circumstances and if not, at least have peace of mind that should anything happen, your investment will be looked after by the insurance company paying out upon a claim.

The standard occurances most common, and so a policy is provided to cover these, are fire and theft. Therefore the policy ‘Third Party Fire and Theft’ does pretty much what it says on the tin.

Theft coverage – If you have reported the theft of your vehicle to the police (necessary for this cover) then you will be able to make a claim with your insurance company. This can cover the cost of the car in entirely (with possible adjustments being made by your insurer) if it cannot be recovered (i.e never to be seen again or tracked down by the police within a reasonable time span). However if you vehicle is recovered you may still be able to make claims if there is some damage done (such as smashed windows to gain entry, etc).

Fire Coverage – this can happen if your car catches alight in a range of eventualities. Common ones are that your vehicle is the subject of vandalism (someone decides to set your car alight), perhaps your car is stolen then the thieves set it on fire, or there is some internal problem with the car and the machine sets itself on fire. All of these problems will be covered and a claim can be made if you take out third party fire and theft insurance.