16 Mar

Types of Car Insurance Explained: Third Party, Comprehensive & Excess

Andy Moody
Vehicle Insurance Guides

If you own a car, you need to get insurance. This is a legal requirement. Yup, unless you have registered your car as being off the road (SORN) you have to insure your car.

This means you’ll need to understand the complexities. And, as there are a few different types of car insurance – each covering an overlapping range of issues, it may feel a little daunting when all you really want to do is get driving Knowing what your insurance covers is essential to getting the right policy for your needs.

We offer temporary car insurance, but you probably already knew that, and that insurance offers comprehensive cover. But what does that actually mean? How is it different to third party car insurance? What’s all this about excess? We’re going to help answer those exact questions to help you make an informed decision.

What is third party car insurance?

Third Party car insurance is the most basic level of car insurance available – and often the cheapest. Not only that, but it’s the absolutely legal minimum requirement for you to drive your car. It does not cover you, it covers a third party. But what does that actually mean, who is this mystical third party?

In Insurance terms, you and your insurance company are the first and second parties. A third party refers to another person you might be involved in an accident with. I.e. it’s the other person on the road, rather than you and your car.

What does third party car insurance cover?

Cover, in this situation, refers to costs resulting from:

  • Injuries to people, passengers or animals.
  • Damage to property.

Third Party only cover does not cover any costs that arise from the aforementioned situations to you or your property, only to a third party and their property.

Still not sure how third party car insurance works? Lets run through a basic scenario:

  1. You have taken out third party car insurance and are out for a drive
  2. You are in an accident and run into the back of another person’s car at the lights
  3. The back end of their car is in pretty bad shape and so’s the front of yours. They’re ok, but you’ve given yourself whiplash.
  4. Third party insurance would only cover the damage to the other car. You’d not be able to use your cover to pay for the repairs needed on your car or with any medical bills for yourself.

What is 3rd party, fire & theft cover?

Third Party, Fire and Theft insurance is the next step up in insurance cover. It still only covers third parties in the event of an accident. However, it adds two additional elements of cover for fire and theft.

What does third party fire and theft insurance cover?

It covers your car if:

  • It is stolen
  • It is damaged by fire

It can also cover you if someone damages it during an attempted theft, but this can vary from policy to policy, so you may want to double check.

What is comprehensive cover?

Comprehensive insurance is the highest level of insurance cover. Not only does it cover everything that third party insurance covers, but it covers a number of other things too. It’s the best car insurance available and should be your go-to level of cover if you are driving an expensive car, take expensive items around with you or simply want to have proper peace of mind.

What does a comprehensive car insurance policy cover?

Comprehensive car insurance covers a whole host of things, including both you and a third party. It covers:

  • Injuries to other people, passengers or animals.
  • Damage to other people’s property.
  • Fire damage
  • Theft
  • Accidental damage to your own car
  • Chipping & scratching
  • Vandalism or other malicious damage to your vehicle

Comprehensive insurance might also cover your windscreen, personal contents and medical cover if you need it after an accident. It can also give you access to a courtesy car and breakdown cover, although both of these are often extra. These are not necessarily included in your insurance policy, so you need to check.

When you have a comprehensive policy you may well need to pay excess. We’ll run you through what that means now.

What is excess in a car insurance policy?

When you make a claim on your insurance, you usually need to pay some of it yourself. This is called the excess. The excess is essentially the minimum claim on your insurance – the insurer pays out the costs of the claim above the excess, and you pay the rest. For example, if you have an excess of £300, and you need to make a claim of £1,000, your insurer will pay £700, and you will pay the £300.

There are two forms of excess that you’ll see mentioned. These are compulsory excess and voluntary excess.

Compulsory Excess

You agree to a compulsory excess with your insurer. This is determined by the insurer, and represents the amount that you need to pay in order to make a claim. This excess is often higher if you are either a young driver, or you drive an expensive car.

Voluntary Excess

A voluntary excess is an amount that you agree to pay if you need to make a claim. Accepting a higher voluntary excess is often a good way to reduce the overall cost of your car insurance premium.

Are there any other types of car insurance?

While third party and comprehensive are the two main car insurance policies that you’ll see when you’re shopping around, you may see a few other specialised types pop up.

Often other types are still simply a form of third party or comprehensive cover, but with a specific use.

These include:

  • Telematics insurance – this refers to a car insurance police that requires your vehicle to be fitted with a ‘black box’ that monitors your driving.
  • Young driver car insurance – insurance that’s specifically designed for younger drivers. We actually offer specific under 21 temporary car insurance and temporary learner driver insurance, for instance, and both of these are fully comprehensive.
  • European or ‘driving abroad’ car insurance – this is insurance that specifically allows someone to drive their car abroad with the same cover they’d have at home. Our temporary policies don’t offer this.
  • Classic car insurance – this is a specialised policy to help insure classic cars.
  • Named driver insurance – this usually refers to someone being added to an insurance policy. They’ll have the same rights as the policyholder when they drive the vehicle.
  • Multi-car insurance – this allows you to add more than one car to the same policy.

You may also see other terms like ‘pay as you go’ insurance being thrown around. This simply refers to how you pay for it. As we said above, each of these types of car insurance is generally just a specific use that uses third party or fully comp cover as the actual insurance policy.

What car insurance extras are there?

All of these policies don’t usually include quite everything. You may still need a few extras. These tend to include:

  • Breakdown cover – this is one of the most common extras. If you break down your breakdown cover will kick in and someone comes to pick it up then take it to get repaired.
  • Windscreen cover – chips and cracks are a common occurrence when you’re driving. Windscreen cover lets you get it repaired for the cost of your excess. This can be part of a comprehensive policy but that’s not a given.
  • Personal accident cover – this will offer compensation should someone be seriously injured or even killed in a car accident.
  • Motor legal protection – this will help cover the costs of legal action you may want to take after an accident that wasn’t your fault.
  • Courtesy car – your insurer will provide you with a car while yours is getting fixed after an accident.
  • Lost keys cover – your insurance policy will get you sorted with a new pair of car keys if yours get lost, damaged or stolen.

Does the length of policy affect the type?

The length of your policy is something that you agree to before you buy it. Many people choose to buy a year long insurance policy. However, this is not your only option. Shorter lengths of insurance policy do exist, and can be a great way to save money. When you get short term car insurance you can still get comprehensive cover and you won’t be limited to third party cover simply because you aren’t locking yourself in for a year.

Temporary Insurance from GoShorty

GoShorty specialises in a few types of insurance – short term car insurance and temporary van insurance policies. We offer drivers cover for between 1 and 28 days. This allows you to only insure the period of time that you are actually using the car for. At GoShorty, we offer fully comprehensive temporary car insurance cover – that means that you can protect a car (as well as the car owner’s No Claims Discount), even if you do not own it.

Get a temporary insurance quote today, and see how much you could save with GoShorty.