Car insurance policy types

Driving without motor insurance is illegal, carrying a maximum fine of £5,000, six to eight penalty points and potentially disqualification from driving.  There are three main car insurance policy types:

  • Third party only
  • Third party, fire and theft
  • Comprehensive

It’s important to know exactly what each level offers to ensure that you and your vehicle are properly protected if you’re ever involved in an accident. There are also more specialist and bespoke packages available.

Third party only insurance

The minimum legal requirement for car insurance is third party, which pays for damage caused to other people's property, or provides compensation for injuries that other people or animals sustain, in an incident judged as your fault.

It doesn’t cover the cost of repairs to your own vehicle and wouldn’t cover you if your vehicle was stolen or damaged by fire. So you’d have to pay for your own repairs and maybe even an entirely new vehicle.

Third party insurance policies can cost less than more extensive policies because the cover is very limited so if your vehicle isn’t worth very much and wouldn’t cost you a lot to replace, this could be the most suitable level of cover for you. However, you should think very carefully about this as legal fees or compensation to another party could be expensive.

Third party, fire and theft insurance

Third party, fire and theft  is the next level up and covers the costs of repairing any damage to your own car, or if your vehicle is stolen or damaged in a fire.

Comprehensive car insurance

Comprehensive car insurance is the highest cover level and protects against damage to your own vehicle, even if you are to blame for the accident. As with all cover levels, policy terms and conditions vary so don’t assume that one comprehensive package is the same as the other – always read the documents your insurance provider sends you.

Other insurance policy types

As well as the three standard levels of cover, insurance companies also offer specialist insurances to meet motorists’ individual needs and ensure they’re always properly covered. There are many, many options but some of the most popular include:

  • Multicar insurance – If multiple vehicles registered at the same address purchase cover through the same provider, they are often rewarded with some form of discount
  • Classic car insurance – Specialist cover tailored to the needs of vintage and cherished vehicles (vehicle age limit may apply)
  • Temporary car insurance – Short term comprehensive insurance usually limited to up to 28 days cover
  • Test-drive insurance – Short term cover providing you with the protection you need when taking a test drive

Find further information here on car insurance or speak to one of our RAC advisers on 0330 159 1019* to get a quote.

RAC Car insurance

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*03 numbers are charged at national call rates and are usually included in inclusive minute plans from landlines and mobiles. Calls may be recorded and/or monitored.

RAC Insurance is a trading name of RAC Financial Services Limited. Registered in England and Wales No. 5171817. Registered office: RAC House, Brockhurst Crescent, Walsall, West Midlands, WS5 4AW. RAC Car Insurance is arranged and administered by BISL Limited, which is an independent intermediary, and is underwritten by a panel of insurers. Registered in England no. 3231094. Registered office: Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS. Both companies are authorised and regulated by the Financial Conduct Authority. 0844 calls are charged between 1p and 13p per minute for landline customers. Calls may be recorded and/or monitored.