Car Insurance Policy Types Explained

Broadly there are three types of car insurance available - third party only, third party fire and theft and comprehensive cover. So what is the difference between each one and how do you decide which is right for you?

- Third party only cover: This is the most basic form of car insurance available in the UK. It covers injuries to other drivers and their passengers; damage to other's property including repairs to another vehicle; liability for accidents arising from the use of a caravan or trailer; and accidents caused by passengers.

Third party only cover is generally preferred by new drivers for whom more comprehensive policies are too expensive. If you drive a cheap car, typically with a value of less than 500, then third party only cover is often the best solution as other forms of cover could cost more than the vehicle itself is worth.

- Third party fire and theft: Known as TPFT for short, this offers all the elements of a third party only policy but with the addition of protection if your vehicle is stolen or suffers fire damage.

TPFT is often deemed a happy medium and has the advantage of offering more cover than third party only cover while remaining much cheaper than comprehensive policies. The main risk remains if your vehicle is damaged in an accident as the cost of repairs will not be covered.

- Comprehensive: Sometimes referred to as 'fully comprehensive' the use of the term 'fully' is often misleading as you are not automatically protected against all risks. Instead you are given a list of options from which you can choose the level of protection you require and the extras you wish to include.

Typical extras that could be added to a comprehensive policy include breakdown cover; courtesy cars; coverage for driving overseas; accidental damage cover; legal expenses; and third party cover for driving other cars. The fewer options you choose the cheaper your premium is likely to be. The key is to get the balance right between cover and price.

If you want to compare car insurance use a comparison website. Searching with a comparison tool will allow you to judge quotes like-for-like to find the right car insurance deal for you.