The Independent’s journalism is supported by our readers. When you purchase through links on our site, we may earn commission. Why trust us?
It’s illegal to drive without car insurance in the UK, so you need to buy cover before you drive your car on a public road.
There are three main types of car insurance: third party, third party fire and theft, and fully comprehensive, and they offer different levels of cover. Third party is the minimum you need to stay within the law, but comprehensive insurance gives you much more protection.
This article explains what each type of insurance covers so you can buy the right car insurance policy for your circumstances.
The three types of insurance all offer different levels of protection. Some insurers also offer add-ons to give you extra protection against certain events. When explaining who’s covered by an insurance policy, insurers talk about “parties”. The first party is you, the policyholder; the second party is the insurance company; and the third party is other people/drivers and their vehicles.
You need car insurance unless you officially register your car as off the road with a Statutory Off Road Notification via the Driver and Vehicle Licensing Agency. If you’re caught driving without insurance, you could end up with an unlimited fine.
Third-party insurance, or third party only, is the minimum level of car insurance you need to legally drive on UK roads. If you cause an accident, third-party cover will only pay other people’s costs, not yours.
Historically, third party was the cheapest type of car insurance, but this is no longer the case for most drivers
You might choose third party if:
Third-party insurance covers:
Third-party insurance doesn’t cover:
Third party, fire and theft insurance covers other people and their vehicles in the event of an accident, but it also covers your car if it’s stolen or damaged or destroyed by fire.
It won’t, however, pay your costs if you’re injured or your car needs repairs after an accident.
Traditionally third party, fire and theft cover was cheaper than fully comprehensive cover, but high levels of claims on this type of policy pushed up the price, so it’s often on a par with fully comprehensive insurance now.
You might choose third party, fire and theft if:
Third party, fire and theft insurance covers:
Third party, fire and theft insurance doesn’t cover:
Fully comprehensive car insurance covers everything covered by third party, fire and theft cover but also includes damage to your car if you were at fault and your medical bills if you’re injured. You’ll also be covered against vandalism and damage from natural events, such as storms and floods, as well as fires.
Some comprehensive policies also offer additional cover for personal injuries and cover for your personal possessions if they’re damaged or stolen from your car.
You might choose fully comprehensive cover if:
Comprehensive insurance covers:
Comprehensive insurance doesn’t include:
Temporary car insurance covers you to legally drive a car from an hour up to several months. You might buy temporary car insurance if you’re borrowing someone else’s car, driving a vehicle in an emergency or test-driving a new car. Temporary car insurance usually offers fully comprehensive cover.
Telematics insurance involves fitting a small tracking device to your car to monitor your driving habits. This “black box” is designed to monitor how you drive on a day-to-day basis. The safer your drive, the lower your insurance premiums could be when it comes time to renew.
Classic car insurance, or heritage car insurance, is designed to cover older classic or vintage cars that are driven less frequently and were usually registered more than 40 years ago.
Learner driver insurance is a type of temporary cover for drivers learning to drive in their own car or that of a friend or family member (driving instructors have their own insurance). You can choose from third party, third party, fire and theft, and fully comprehensive learner driver insurance.
When you buy car insurance, you’ll have the option to add on various other types of cover for an extra charge, including the following:
It might seem logical that third-party and third party, fire and theft cover are cheaper than comprehensive insurance, as these types of insurance offer less cover. While this was previously true, it’s no longer the case for most drivers. This is because in the past, high-risk drivers (such as young drivers and those with driving convictions) would choose third-party or third party, fire and theft cover to reduce their insurance costs. This resulted in insurers dealing with more claims from high-risk drivers with third-party policies, so these policies are now associated with a higher crash risk and are typically more expensive.
The cheapest car insurance policy and insurer will depend on your personal circumstances. The most affordable insurer for one driver might not be the cheapest for another, so it’s important to shop around and compare premiums and the things that different policies cover.
Car insurance premiums are based on how likely your insurer thinks you are to make a claim and how expensive any claim could be.
Insurance companies calculate a customer’s premium by looking at various factors, such as:
You can add most optional extras, including breakdown cover, a courtesy car and personal belongings, to any type of car insurance, although exactly what you can add will vary. Some fully comprehensive policies cover some optional extras as standard, so take this into account when you’re comparing policies.