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Third party car insurance offers the minimum level of cover legally required for UK drivers. It can lower your motoring costs, but could prove a false economy if you don’t know what you’re getting into.
Here’s what you need to know about third party car insurance.
What third party car insurance covers
If you’re involved in some kind of incident on the road where you are at fault and you need to make a claim on your insurance, third party car cover will only pay for damage to other vehicles, people (including your passengers), and their property.
In other words, your insurer won’t pay to repair or replace your vehicle – you’ll have to foot the bill yourself. That includes the cost of replacing a stolen vehicle or repairing a fire-damaged vehicle.
If you were involved in an incident that wasn’t your fault, the at-fault driver’s policy would compensate you for damage to your vehicle and any other legitimate costs or expenses incurred as a result of the accident.
Third party car insurance differs from third party, fire and theft cover which, while similarly limited to paying damages to other people, also pays out if your own vehicle is damaged by fire or is stolen.
Both offer less protection than comprehensive insurance, which covers everything mentioned so far, but also pays out for damages to you, your vehicle and your property in the event of accident, fire or theft.
What third party car insurance costs
Third party cover offers the least protection, so logic might dictate that it is where you’d find the cheapest premiums. However, this is not guaranteed to be the case.
Insurers found that higher-risk drivers, perhaps when faced with the steep cost of higher levels of cover, were buying third party car insurance to make motoring affordable. But that meant more payouts in the cohort of drivers who were paying the least for cover.
As a consequence, the cost of third party cover has risen to the point where there’s often less disparity between it and other types of cover than might be expected.
It’s worth using a price comparison tool like ours to see just how premiums differ at each level of cover. If the difference is relatively small, it makes much more sense to buy the most comprehensive policy you can afford.
If, on the other hand, there is a lot of money to be saved by choosing third party car insurance, you should think carefully about how you’d pay for expensive repairs or even a new vehicle if you were involved in a claim that was your fault.
If you’re prepared to accept that risk,third party car insurance can be a valid way to save money – especially if your vehicle isn’t worth a lot, or you know that it’s relatively cheap to buy replacement parts for it and to repair it.
What affects the cost of cover?
As with all car insurance premiums, the price you pay entirely depends on you, your vehicle and your history behind the wheel. What might be cheap for one driver could be very expensive for another, so the question ‘Is third party car insurance cheaper?’ isn’t easily answered.
Some research has found third party car insurance to be the most expensive level of cover, in general – despite offering the least cover. That’s why it’s important to use a price comparison tool to see quotes rather than making assumptions.
Key differences between levels of car insurance
Who should get third party cover?
Third party cover has often been chosen by drivers looking to save money on cover, since it offered the lowest level of protection and was, traditionally, the cheapest.
But as drivers who were being quoted high premiums, usually because of their inexperience or history of claims, flocked to money-saving third party policies, insurance providers realised that a lot of risk was being pooled in that cohort, and they generally increased prices.
So, while it’s possible to save money with a third party policy, it isn’t guaranteed.
As a third party policy only covers damage to others and their vehicles/property, it is perhaps best suited to drivers who can afford to, or are willing to, pay for their own damages.
Frequently Asked Questions (FAQs)
Is third party car insurance cheaper than comprehensive car insurance?
It can be, but this depends on your circumstances.
The cost of third party car insurance has increased over time as drivers with higher risk profiles moved away from comprehensive cover and took out third party policies to save money. As these riskier drivers inevitably made more claims on their third party policies, insurers increased prices accordingly.
With that said, third party car insurance is still likely to be cheaper than comprehensive car insurance in many cases.
How do I get a third party car insurance quote?
Our car insurance comparison service can help you gather insurance quotes for any kind of cover, including third party cover. Click here to get started.
Can I get a no-claims discount with third party insurance?
Yes, third party car insurance works the same as any other level of cover in the sense that you’re rewarded for not making claims with cheaper renewals. The fact that you can only claim for damages to other people and their property doesn’t make a difference to your ability to earn a no claims discount.
Am I covered for fire and theft?
A third party only policy does not cover you for fire and theft claims. To get that level of protection you’ll need a third party, fire and theft policy, which typically costs more.
