Car insurance explained

Car insurance explained

Car Insurance can vary hugely depending on what policy you have. Usually, car insurance covers your vehicle, any damage caused in an accident or crash either to your vehicle or another, damage to the property of other drivers and finally just to other motorists in general.

It can also be extended to cover break down costs, medical assistance that may be required and personal belongings. The main types of car insurance are Third Party; Third party, Fire and Theft; and Comprehensive car insurance.

Third Party Car Insurance

Third party car insurance is the lowest level available and covers damage caused by you or one of you passengers to other drivers and their vehicles as well as objects such as lampposts and walls. This type of insurance, however, does not cover the cost of damage to your own car meaning any damage that is caused you will have to pay for it.

Third Party, Fire and Theft Car Insurance

The Third Party, Fire and Theft policy covers exactly the same things as the third party however, it will also pay to replace or repair your car should it be stolen or damaged in a fire. It is often taken out by those that have Third Party Insurance but also want a greater layer of protection.

If your vehicle was relatively cheap, or quite old, it is a good idea to look into Third Party, Fire and Theft Insurance as it is often a lot cheaper than fully comprehensive cover.

Comprehensive Car Insurance

Comprehensive car insurance is widely thought of as the best level of cover you can get from a car insurance policy. Comprehensive insurance covers not only damage to your own vehicle but also any damage suffered by others, from any cause, including accident, fire and theft.

This is a better standard of protection offered by either Third Party or Third Party, Fire and Theft insurance.

Comprehensive car insurance, however, is known to contain a lot of different clauses – and not all policies are the same. For example, some will require the policyholder to be driving the vehicle, while others do not.

This is why it is so important to thoroughly read the terms and conditions of your insurance policy, so you are fully aware of what is covered and what is not.

Changes to your premium

Your insurance premium is based upon a number of different things including your history as a driver, the car itself and how powerful it is and your own personal circumstances. Therefore if you are a more experienced driver, in a safe area with a sensible car your premium will be cheaper.


You also have to consider your excess, which is the amount of money that you pay towards any claim that you make. There is the compulsory excess that the car insurer sets and then the voluntary excess. This must be carefully chosen because it can affect the size of the insurance premium that your insurer offers you.

No claims bonus

Finally, the no claims bonus is a discount that may be offered by insurers if you can go claim free for a long period of time. The bonus is cut should you make a claim but you can pay to protect which is typically around 10-15% of the insurance premium. This policy differs from insurer to insurer so be careful to check and make the right decision.

Compare different car insurance types and policies

If you’re wanting to purchase a car insurance policy, this is why it is important to compare all the different types – as well as the policies themselves – to make sure you get what you need from a policy. There are a huge range of insurance comparison websites available and ensuring that you compare all the deals is key.

Quick links