What is third party car insurance?

When seeking the cheapest possible insurance for your car, you could easily reach for a third party car insurance policy out of a belief that it must surely be the least expensive. This can seem like a rational conclusion to make, given that such a policy would give you the bare bones of legal cover.

It is telling that, in a survey of 10,038 motorists, 72% reckoned that third party insurance is cheaper than the highest tier of car insurance. While such beliefs aren't always borne out in reality, there remain situations where selecting third party cover can be sensible.

How much coverage does a third party policy provide?

Without car insurance, you aren't legally allowed to drive a car on UK roads; it's as simple as that. Given this necessity of cover, it's understandable if you want to see what type of policy is the least you can get away with while still adhering to the law - and the answer is third party insurance.

Should you injure someone or inflict damage to their property when you are driving a car but covered by such insurance, that person - the "third party" - would be covered, but you wouldn't. Therefore, if your vehicle is stolen or picks up damage in the fracas, you would have to recompense yourself through your own means, as the insurer wouldn't be willing to pay out.

Examples of third parties who could be eligible for compensation under this kind of policy include pedestrians and other drivers. As a result of an accident for which you may have been to blame, third party insurance could help you fund repairs or legal or medical bills for the third party.

How do other insurance options differ?

You might have heard of "third party, fire and theft" insurance, which is not to be confused with what can sometimes be referred to as third party only cover. The broader type of insurance works like third party except that, if your vehicle is stolen or fire-damaged, you can also claim for repairing or replacing it. This kind of insurance is the next level up from the third party only variety.

The highest level, meanwhile, is called fully comprehensive. It covers all of the same things as third party, fire and theft, along with damage to your vehicle - even if you were at fault for the accident. Things for which fully comprehensive insurance lets you claim, according to the Money Advice Service, include accidental damage and vandalism, such as deliberately-caused scratches to the car.

Is a strictly third party policy always the cheapest option?

It might surprise you that the answer is actually "no"! According to one study cited by The Sun, while a third party policy can be just short of £2,000 in average cost, comprehensive cover can be nearer £1,000 on the same count. What can explain this large discrepancy? One word: risk.

Some insurers have noticed that drivers who are riskier on the road - and, thus, tend to face higher insurance premiums - have chosen strictly third party cover because it was relatively inexpensive. However, it is not so financially appealing now, as insurers have since increased the price of such cover to account for the high risk drivers, like young drivers, who often select it.

Should you still seriously consider third party insurance?

It depends very much on your circumstances, as there is no blanket rule that such cover is always the poorest option in terms of value for money. If you notice that comprehensive insurance still seems out of your financial reach, third party might be a better option in particular situations.

Those situations include if you lack a no claims bonus or live somewhere considered risky, such as an area with a high rate of crime. Third party might also warrant your consideration if the car's worth is beneath, for example, £1,000 - making the purchase of another car affordable even post-accident.

Tips for overcoming struggles in finding inexpensive cover

Given the well-documented prohibitive prices attached to third party cover, you could feel at a loss as to how to find good value insurance at this level. That could be the case even if you have singled out third party as what is likely to be the most cost-effective insurance option for you.

However, rest assured that, as an independent broker regulated by the Financial Conduct Authority, we are well-positioned to help you find an affordable policy. You can give us a call with a mobile on 0333 003 3270, dial our company through the landline number of 0800 298 2190, or apply through our website. These flexible options make it easier for you to get the quote you need.

As well as third party car insurance, we can also offer policies for insurance that would account for damage to your own car as well as other people's. We have friendly, UK-based staff who will waste no time in answering calls and can also help you prevent paperwork gathering untidily in your home. They provide a streamlined way of sourcing motor insurance.

Author: Call Wiser


Call Wiser is a trading name of Be Wiser Insurance Services Ltd. Registered in England No. 6097813. Be Wiser Insurance Services Ltd are Authorised and Regulated by the Financial Conduct Authority 465471

Call Wiser, Riverside House, 35-37 Bridge St, Andover, Hampshire, SP10 1BE, 0333 003 3270, general@callwiser.co.uk