What is car insurance?

What is car insurance?

Car insurance protects other road users if you damage their vehicle or property.

And depending on the level of cover you have, it can also cover your car if it is stolen, broken into, or if you’re involved in an accident.

All cars must be insured, unless not in use and off the road (for example, stored in a garage), with a statutory off road notification (Sorn).

There are three main types of car insurance cover, which we cover in more detail in our types of car insurance guide, but in brief, you can opt for:

Third party. This is the minimum level of cover needed to drive legally, and only covers damage to someone else or their property.

Third party, fire and theft. As above, but with additional cover in case the car gets stolen or catches ablaze.

The widest level of cover available. You get third-party, fire and theft cover, plus if you have an accident and it was your fault you can claim the cost of repairing your car (as well as any damage you cause to someone else or their property).
What’s the cheapest type of policy?

This isn’t a straightforward answer as the cost – your premium – is based on how much of a risk insurers perceive you to be.

It’s about how likely the insurer thinks you’ll be to make a claim – so, for example, new, young drivers will pay more than someone who can prove they’ve been accident-free for years.

This also extends to the type of policy. You’d naturally assume third-party cover would be cheapest because it’s lesser cover, but car insurance isn’t always logical.

Some insurers may see you as more responsible if you opt for comprehensive, so price you as a lower risk, giving you a wider level of cover for a smaller cost.

There are no hard and fast rules here though – it’s a matter of trial and error when getting quotes.

But never just check third party if you’re looking for the cheapest policy.

Read on for full help and tips, or see our Young drivers’ insurance guide if you’re aged 17-24 or Multicar insurance if you’ve more than one car to insure.