Car insurance is an area that can be complex but is also incredibly important so it is essential that every motorist has a clear understanding of the different types of cover and what they need.
With this in mind, here is a closer look at the main types that you need to know about in the UK.
Third-Party
Third-party is the most basic level of legally required car insurance (but not necessarily the cheapest which is why you should always shop around).
This is a level of cover which will provide financial protection from damage caused by you or one of your passengers to others, incoming damage to other drivers, their vehicles and property. This does not include cover for damage to your own car.
Third-Party, Fire & Theft
Provides the same cover as above but will also cover the cost of repairs or a replacement car if it is damaged by fire or stolen.
Comprehensive
As the name suggests, this is the most comprehensive level of legally required car insurance and covers all of the above in addition to damage to your own vehicle.
In some cases, this level of cover will also allow you to drive the cars of others too.
GAP Insurance
There are also optional policies available which are important to consider, including GAP insurance.
GAP insurance can be purchased from a specialist like Direct Gap and will cover any shortfall between an insurance payout and the amount originally paid if the car is written off.
Comprehensive policies only pay the current market value which could be significantly less due to depreciation.
What is Excess?
Excess is another area that can cause some confusion.
This is simply the amount that you pay towards any claim that you make on your car insurance policy and there are usually two types – compulsory excess which is set by your provider and voluntary excess which you can set yourself.
The higher your excess the lower your premium but you must be careful because you need to make sure that you can afford the excess if you make a claim.
Am I Covered Overseas?
Your insurer automatically provides cover to meet the minimum legal requirements of the country that you are driving in when in the EU but this is rarely higher than third-party insurance.
Hopefully, this will help you to get a better understanding of the types of car insurance available and allow you to find the best type for your particular needs.
