Third party car insurance explained
Is basic third party cover enough insurance for you?
Image: Andri Berger - Getty
Third party insurance is the cheapest level of car insurance and the minimum required by law.
So, as far as the Road Traffic Act is concerned, it's essential. However, it will only cover your liability to others. There is no cover for injury or damage to yourself, or your vehicle.
If you hit another car and are held responsible for the damage and/or injury to the occupants of the other vehicle, a third party policy will pay to repair the vehicle and cover the cost of any medical claims for injuries suffered to the driver or passengers.
As far as you and your vehicle and its occupants go, you are effectively uninsured. All any injured occupants in your own car could do is claim compensation from you, as the driver, if it can be found that you were at fault.
Another important thing to note is that basic third party cover doesn't cover the theft of your vehicle, or damage caused by fire. If you want that level of cover you need to opt for a policy that covers Third Party Fire & Theft.
If you have a car with a very low value, then third party cover may be the best option for you. It may also be all you can afford as a new driver with no insurance history. It may also be suitable if you have separate medical or life insurance that would cover injuries sustained in an accident.
However, if you want the peace of mind of knowing that you and your vehicle are fully-insured in the event of theft, fire, or an accident, either through fault of your own or that of a third party, then you are probably better off opting for a comprehensive policy.
Please note that articles on MSN Money do not constitute regulated financial advice, which recommends a course of action based upon the specifics of your personal circumstances. The articles are intended to provide general personal financial information. We urge you to consult an Independent Financial Adviser (IFA) before making any important decisions about your finances. You can search for an IFA in your local area. Any statement regarding financial services products and tax liability is based on legislation and tax practices as at 6 April 2011, which is, of course, subject to change. The value of any tax benefits or reliefs depends upon the individual circumstances of the investor. When investment performance is mentioned you should remember that past performance is no guarantee of future performance. Where products have an underlying investment content, in many cases the value of the investment can fall as well as rise. For with-profit based investments, there is no guarantee as to the level of bonuses that will be declared, if any. Where mortgages or secured loans are explained do remember that your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. All mortgages are subject to underwriting, status and are not available to people under the age of 18.
Do you support the new banking inquiry?
Thanks for being one of the first people to vote. Results will be available soon. Check for results
- Yes, I think the Big Four are too powerful and resistant to change
- 80 %No, I don’t believe it will result in real change that will benefit the consumer