Skip to content
Young family leaning out of car windows

Car insurance policy types

Find out more about what each level of cover offers

Car insurance policy types

What are the main car insurance policy types?

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 three main car insurance policy types:

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

There are also more specialist and bespoke packages available. Driving without motor insurance is illegal, carrying a maximum fine of £5,000, six to eight penalty points and potentially disqualification from driving.

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 whether you could afford to repair or replace your vehicle and any other expenses.

Third party, fire and theft insurance

Third party, fire and theft is the next level up and covers the costs of repairing any damage that occurs as a result of fire or theft, 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, car 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:

  • Learner driver insurance – covers you for learning to drive in your own or a family member’s car. If it’s not your car, a learner driver policy will protect the owner’s No Claims Discount. If you have a provisional driving licence, we can cover you from 1 day up to 5 months.
  • Black box insurance – is a pay how you drive insurance policy. It is aimed at young or new drivers, who typically have higher premiums because they are perceived to be a greater risk. Black box (or telematics) technology gives drivers a score based on how safely they drive. This gives them the chance to bring down their premium at renewal.
  • Pay by Mile car insurance – is a monthly subscription-based car insurance that is fairer for lower mileage drivers. You pay a monthly parked premium and then only pay for the miles you drive, and not for those you don’t. This type of pay as you go car insurance could save you money if you drive less than 6,000 miles.
  • Classic car insurance – accounts for the fact that you’ll use it differently to a day-to-day vehicle. Classic car insurance provides cover for public road rallies and trials, with the option for laid-up cover, which applies if the car is off road and being restored, stored, or rebuilt.
  • Temporary car insurance – is a short-term car insurance policy if you need to borrow or share a car that offers cover from as little as an hour up to 30 days. Our policy also covers business use for work-related travel, so you don’t have to go to the expense of adding this to your annual policy.
  • Electric car insurance – is a specific policy to cover your electric vehicle including things like battery cover for accidental damage, fire, and theft as standard.

RAC Car Insurance

RAC Comprehensive Car Insurance Plus has been given a 5 Star Rating by Defaqto.

Get a quote
Young family putting things into a car boot