Isn't third party car insurance a lot cheaper than comprehensive?
It used to be, but it isn't anymore. This is because insurers have found that there are much higher levels of claims made by motorists who have chosen this type of cover. As a result it is often more expensive, particularly for those looking for a no-deposit policy. There are several reasons for this:
- Motorists looking for the cheapest possible cover often have old cars, which lack the safety features of newer ones;
- If they are very short of money they may skimp on maintenance, and their cars may be more dangerous as a result;
- This was traditionally the type of cover bought by younger, and high risk, drivers.
Insurance premiums are governed by risk, and the higher that the insurance companies view that risk, the higher the premium will be. in fact:
Will it be more expensive for me then??
Not necessarily. If you are an experienced motorist with a good claim and conviction free record you may find it a cheaper option, particularly if you drive a car that isn't worth a lot, that you can replace easily if it is badly damaged or even written off. However, if you are a young driver, have had a few bumps or have picked up some speeding find you will probably find a comprehensive policy to be cheaper; and with better benefits too.
Are there any benefits to a third party policy?
- There is usually little, or even no, compulsory excess. This is the sum of money that has to be paid out of a driver's own pocket in the event of a fault accident. Whilst a motorist with comprehensive cover who has been judged to be responsible for an accident may have to pay out a large sum to cover this excess, someone with third-party cover will usually have little or nothing to pay in this way.
- This cover is the minimum that the law demands. if you merely wish to drive within the law, without any additional benefits, one of these policies will suffice.
Are there any disadvantages?
- Whist a policy of this type would pay for any damage to other people, or their property, if you had an accident which was your fault, it wouldn't pay for yours.
- The majority do not allow the policy holder to drive someone else's car, which is pretty standard for most comprehensive ones.
- Drivers looking for no-deposit insurance are already viewed by some insurers as being more risky than those who pay in full, right at the beginning. Buying a third party policy increases the risk even further in their eyes, and can lead to a substantial hike in the premium.
Why do people still buy third party cover?
If you are prepared to go without the benefits that a full policy brings, and you just want to comply with the law, then compare quotes by all means. You may be amongst the minority who find it a cheaper option. However, get quotes for fully comp cover too. You may find that it costs even less, whilst giving you additional benefits.
- If you have a cheap car, feel that you are at a high risk of having an accident, and are worried about paying out a large excess in the event of an accident, a policy of this type could save you from this possibility. So, even if the initial premium costs about the same or even more, it may still give you better peace of mind.