What type of car insurance do I need?
You'll need to ask yourself a number of questions to establish the best type of car insurance for you. An important factor for a lot of people is cost and so you need to understand how much you can realistically afford as this may dictate the type of car insurance you end up buying. What is the age of your car, how valuable is it and how expensive would it be to replace it? Where do you park your car and what type of area do you live in? The most basic types of car insurance will only pay out for damage to other people's vehicles and property whereas the most comprehensive types of car insurance will pay out for damage to your own vehicle, including accidental damage and vandalism.
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What are the different types of car insurance?
The three main types of car insurance are:
- Fully comprehensive
- Third party, fire and theft
- Third party
We've summarised the three main types of car insurance in a simple comparison table below.
Car insurance types - Comparison table
| Fully comprehensive | Third party, fire and theft | Third party | |
| Damage to other people's car or property | Yes | Yes | Yes |
| Compensation claims for injuries caused by you (including injuries to your own passengers) | Yes | Yes | Yes |
| Fire damage to your car (whether accidental or as a result of arson) | Yes | Yes | No |
| Replacement of your vehicle if it is stolen | Yes | Yes | No |
| Damage to your own car or property | Yes | No | No |
| Personal injury compensation | Yes | No | No |
| Criminal damage/vandalism | Yes | No | No |
We explain each of these three types of car insurance in more detail below.
What is fully comprehensive car insurance?
Fully comprehensive car insurance is the highest level of cover you can buy and it is thought to be the most expensive, but that is not always the case. It provides cover for damage to your own vehicle and most policies allow you to claim if your vehicle has been vandalised. You'll also be able to claim compensation for personal injury if you have fully comprehensive car insurance and some policies even include windscreen cover, meaning you can get your windscreen repaired or replaced if it is damaged.
Fully comprehensive car insurance typically provides cover for:
Some fully comprehensive car insurance policies also include:
Fully comprehensive car insurance policies vary from insurer to insurer. Some car insurance providers include the above features in their standard fully comprehensive policy, however, some providers may charge extra. Always check the quote to understand exactly what is included in the policy.
What is third party, fire and theft car insurance?
Third party, fire and theft car insurance provides slightly less cover than fully comprehensive insurance as it won't pay towards the cost of repairing or replacing your vehicle if it is involved in an accident and you won't be able to claim compensation for any injuries. It offers more cover than third party car insurance as your vehicle will also be insured against fire and theft.
Third party fire and theft car insurance provides cover for:
Some policies may also pay towards the cost of repairing a vehicle if it receives damage as a result of attempted theft, such as a broken window or damaged electrics.
Third party fire and theft car insurance will not provide cover for:
What is third party car insurance?
Third party car insurance is the minimum level of car insurance required to legally drive on UK roads. Third party car insurance is the most basic type of car insurance but despite this, it is not always the cheapest. Third party car insurance will only insure you against damage to other people's vehicles or property meaning you will not be compensated if your vehicle is damaged. Third party car insurance will also cover you for compensation claims that are made against you for any injuries that may have occurred, including injuries to passengers in your own car. It is worth noting that if you are involved in an accident that you can prove is the fault of the other driver you could make a claim against their insurance even if you only have third party insurance on your car.
Third party car insurance provides cover for:
Third party car insurance will not provide cover for:
Other types of car insurance
The three types of car insurance we have described in this article explain the different levels of cover available, but there are a few other types of car insurance that you can buy and we explain each of these below.
Temporary car insurance
Temporary car insurance is a comprehensive car insurance policy that covers you for a limited period, usually up to a maximum of 28 days. This type of car insurance would be suitable if you needed to use someone else's car for a short period of time.
Multi-car insurance
Multi-car insurance is where policyholders can insure multiple vehicles on the same policy and get rewarded with a discount. The vehicles usually need to be registered at the same address. For more information read our article 'Multi-car insurance – how to insure 2 cars and save money'.
Test drive insurance
Test drive insurance ensures that you are covered when test driving a new vehicle.
Classic car insurance
Classic car insurance policies are specialist policies that are tailored to the needs of vintage, antique and classic car owners.
Telematics
Telematics car insurance, also known as black box insurance, is where an insurer installs a device to your car to monitor your driving. It is usually popular amongst young drivers as it can offer discounts on car insurance if the car is driven safely.
Gap insurance
Guaranteed Asset Protection (GAP) insurance is an insurance policy that bridges the gap between the amount you paid for your car and the amount an insurance company would pay you if your car is written off or stolen. This type of insurance policy is often sold as part of a package when you purchase a brand new car and is not a replacement to the main insurance on your vehicle.
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Car insurance policy extras
It is possible to cater your policy to suit your requirements with additional extras. When looking for your car insurance policy check what extras are added and if they are required as adding and removing them can affect the cost of your policy. We share some of the optional extras that can be added to your car insurance below:
- Breakdown cover - You can choose to add breakdown cover to your policy which means you can have help and recovery if your vehicle breaks down. It is worth shopping around to ensure you are getting the best deal though as it may be cheaper to buy breakdown cover directly.
- Motor legal cover - If you will need help with legal proceedings following an accident it is worth considering the optional motor legal cover. Before adding it to your policy, ensure that you are not already covered elsewhere or have suitable cover. Have a look at our complete guide to car insurance legal cover for more information.
- Windscreen cover - Windscreen protection can cover your windscreen if there is damage or it needs replacing.
- Lost key cover - Replacement key cover can be added if your vehicle keys are damaged, lost or stolen. In some instances, you may also be covered if the locks on your vehicle need replacing or are damaged.
How much does car insurance cost?
How much you pay for your car insurance varies depending on numerous factors including the type of policy you choose. Fully comprehensive car insurance is often assumed to be the most expensive as it is the most comprehensive, however, it is not always the case. An average quote for fully comprehensive car insurance with Compare the Market in June 2024 was £810 compared to £1,942 for third party car insurance. Find out more about the cost of car insurance in our article, 'How much does car insurance cost?' There are also ways that you can try to reduce how much you pay for your car insurance such as shopping around with insurers and increasing your policy excess. We share our car insurance money-saving tips in our article, '10 tips to save money on your car insurance'.
Things to consider before buying car insurance
Deciding on the type of cover is just the first part of the process when buying car insurance. There are other things to consider which we have summarised below.
Excess (Voluntary or Compulsory)
'Excess' is the amount you need to pay in the event of a claim. There are two types of excess and we explain each of these below.
- Compulsory excess - This is set by the insurance company and will be based on a number of factors including your age, driving experience and the type of car you drive.
- Voluntary excess - This is an amount that you choose to pay towards a claim. If you consider yourself to be a safe driver then you may want to increase your voluntary excess in order to bring down your monthly premiums.
No claims bonus
A no claims bonus - sometimes referred to as no claims discount - is a discount that is applied to your car insurance quote to reward you for being a safer driver. For each year that you do not make a claim, your discount will increase, usually up to a maximum of around nine years. When obtaining a quote for car insurance, you may be asked whether you want to protect your no claims bonus. This is effectively an extra insurance policy that ensures you keep your no claims discount even if you end up needing to claim on the policy. For more information on whether it is worth protecting your no-claims bonus read our article 'What is a no-claims discount and is it worth protecting?'
Courtesy car
If you are involved in an accident then a courtesy car ensures you have access to a vehicle while yours is being repaired or replaced. Some fully comprehensive car insurance policies automatically include a courtesy car, however, some car insurance providers require you to select it as an optional extra and so may charge more.
Additional drivers
You have the option of adding other people to your car insurance policy. You'll need to confirm whether they are the 'named' driver or an 'additional' driver. The named driver should be the person who uses the car most often.
How to buy car insurance
If you have decided on the car insurance that you need and are ready to purchase, one of the easiest ways to do this is via a comparison site such as Quotezone*. Comparison sites allow you to compare multiple policies at once to find the best deal. We have partnered with Quotezone* so that you can search and compare quotes from over 120 UK car insurance providers. Remember, however, that not all comparison sites are whole of market and you may be able to get a better deal elsewhere.
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