What do the Different Types of Insurance Mean?
If you own a car, you need to get insurance. This is a legal requirement, unless you have registered your car as being off the road (SORN). There are a few different types of car insurance – each covering an overlapping range of issues. These can seem complicated, but knowing what your insurance covers is essential to getting the right policy for your needs.
Third Party car insurance is the most basic level – and often the cheapest. It does not cover you, it covers a 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. 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.
3rd Party, Fire & Theft
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. This type of insurance also covers your car if it is stolen or damaged by fire. It might also cover you if it is damaged by someone attempting to steal it.
Comprehensive Insurance is the highest level of insurance cover. It covers all of the previously discussed issues. Comprehensive insurance also covers damage to your car, possessions and self.
Comprehensive Insurance might also cover your windscreen, personal contents and medical cover if you need it after an accident. These are not necessarily included in your insurance policy, so you need to check.
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.
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.
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.
Length of Policy
The length of your policy is something that you agree 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.
Insurance from GoShorty
GoShorty specialises in a few types of insurance – short term car and 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 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.