In the UK, there is a legal requirement to purchase car insurance if you own a car. You can face a hefty fine or even face prison if you are found to not have insurance while driving a vehicle on UK roads.

This law was introduced to protect the consumers from large financial losses, as result of an accident where they are liable for to the repair cost of the vehicle they hit. So while the law does not dictate the types of insurance you must take, the insurance policy, must at least, pay for the damage done to another party.

There are 3 types of insurance policies available to the UK motorist. Third Party, Third Party Fire and Theft, and Comprehensive Insurance. The type of policy you choose is dependant on three main factors, the cost of the policy, the cost of your vehicle and the cost of repairing your vehicle.

Third Party

The minimum level known as Third Party, does not cover your vehicle, but only covers damage done to another vehicle or property, should you be liable. In addition, his policy also offers protection against legal liabilities should there be a dispute in court.

This is the cheapest insurance that you can take for your vehicle. This is ideally suitable for owners of older vehicles where cost of repair, or replacement, is cheap compared to the cost of the insurance policy. Typically young drivers, such as students, would find this policy most suitable for them, as they are typically driving their first car, which is usually inexpensive, and need a cheaper policy as they are not in full-time employment.

Third Party, Fire and Theft

The next level up is Third Party, Fire and Theft. This is similar to Third Party insurance, but has the additional benefit of covering your vehicle should it be stolen or burnt due to some engine failure or vandalism.

People with second cars usually take out this policy. The car they own is usually a popular model, so repairs are cheap, since parts are plentiful, but the cost of replacement is high. For most insurance companies, there is not much difference between the premium costs of Third Party, and Third Party, Fire and Theft, so the typical customers of Third Party policies would also buy this policy.

Comprehensive

Finally, Comprehensive insurance the highest level whereby you and your vehicle are covered as well. This is the most popular form of cover as it covers against any accidental damage that may be caused to the policy holders car. However, this added cover also increases the cost of the policy, but if you want to be covered against as many risks as possible, then comprehensive insurance is the best solution. Motorists with newer cars usually take out this policy, since the cost of repairs and replacement, can be quite substantial.

So when you are shopping around for insurance, make sure you specify the type of policy you want based on your requirements, as you can make great savings if you choose the most suitable one.

If you want to find the best deals for car insurance, try our car insurance comparison page.