What Is Third Party Insurance For a Car? Everything You Need to Know

Third party insurance is the minimum level of cover you’re required to take out to drive a car in the UK.

But, what is third party insurance for a car exactly, what does it cover, and is it the right option for you?

Let’s find out.

What Is Third Party Insurance For a Car?

Third party insurance is the most basic insurance coverage that every driver is required to purchase under UK law unless they register their vehicle as SORN.

It is essentially a form of liability insurance that drivers have to get to drive a vehicle on public roads.

What Does Third Party Insurance Cover?

A third party car insurance policy covers compensation for any injuries you may cause to a third party and the cost of any damage to another person’s property. 

Third party insurance doesn’t cover you or any damages to your vehicle. This means that you’ll have to foot the bill if your vehicle needs repair work and pay for any medical costs that stem from an accident on the road even from uninsured drivers. 

How Does Third Party Insurance Work?

When you get in an accident and sustain damage to your vehicle or personal injury, you make a claim with your insurance provider to cover repair and medical costs. 

With third party insurance, when another driver makes a claim against you, your insurance will cover the costs for them. However, you won’t be able to make a claim with your insurance company for yourself and your car since third party insurance only covers the other driver, their car, and their passengers. 

You could only make a claim if the other driver is at fault. In this case, their insurer will cover any repair work and medical bills you rack up.

What Other Classes Of Car Insurance Are There?

In the UK, drivers have three policy choices when it comes to vehicle insurance: 3rd party car insurance (also known as third party only or TPO), third party, fire, and theft insurance, and fully comprehensive insurance.

Third party only

This type of insurance only covers the costs of damage or personal injury sustained by a third party (the other driver, their passengers, their vehicle, and your passengers).

Third party, fire, and theft

Third party, fire, and theft insurance provides a little more cover than the basic TPO insurance. 

In addition to the damage or personal injury caused to a third party (by you) in an accident, your insurer will pay for any repairs needed in case of an accidental fire or arson, the cost to repair damage to the car after a break-in, and the cost to replace the vehicle if you can’t recover it after a theft.

Comprehensive

Comprehensive insurance provides the highest level of cover. It includes everything offered in TPO and third party, fire, and theft insurance, plus the full cost of repairing damage to your vehicle, even if you’re deemed at fault and personal injury.

Third Party Insurance vs. Comprehensive

The main difference between third party insurance and comprehensive insurance is that the former won’t pay for your costs when the accident is your fault. 

With car insurance that is third party only, your insurance company will pay for any damage or personal injury to a third party, but it won’t cover any medical or repair costs that you incur as a result. 

If you take out a comprehensive policy, the insurance will pay both for the third party and you, regardless of whether you were at fault or not.

What Are The Most Common Policy Add-Ons?

Policyholders can choose to include additional coverage to their policy for a little extra premium amount. 

Some of the most common policy add-ons offered by most insurance companies include:

Guaranteed car replacement

If after an accident your car is rendered undrivable or in case of a theft, this add-on will ensure that your insurer provides you with a vehicle you can use until the car is repaired or found. 

Legal cover

This policy covers any legal fees you may face after an accident that was not your fault. It’s important to note that with a legal cover, your insurance company will only pay for the legal expenses associated with claims made against you and not the claims themselves.

Personal accident coverage

This insurance is often included in life policies and pays out compensation if you suffer a serious injury or death as a result of an accident. It protects against accidents or injury at work, total and permanent disability, or loss of body parts.

Breakdown cover

Breakdown cover pays for the cost of roadside repairs and vehicle recovery. It only covers repairs made at the scene by the breakdown mechanic and not the cost of any parts, such as a new tyre.

What Happens If You Are In a Car Accident And You Only Have Third Party Car Insurance Coverage?

If the accident is your fault and you have third party car insurance in the UK, your insurer will compensate the other driver for any damage or personal injury they sustained akin the accident. 

For example, if you drive into a car at a turning, damage the car, and cause injury to the driver and their passenger, your third party insurance for your car will pay for the damage to the other car and any medical expenses racked up by the driver of the other car and their passengers.

If you didn’t cause the accident, the other driver’s insurance policy will cover the cost of any damage to your car and medical expenses.

How Much Does Third Party Car Insurance Cost?

Although third party insurance on a car offers minimum coverage, this type of insurance isn’t necessarily the cheapest. 

Based on numbers for May 2022 from Compare The Market, 51% of people paid an average of £1,409.97 a year for third party insurance only. Stats also show that more than half reported a quote of £935.88 per year for their third party, fire and theft car insurance and another 51% achieved a quote of £545.42 a year.

But, why is third party insurance the most expensive?

One of the things that insurers look at to determine premiums is past claims. Since TPO policies generally have a higher number of claims, car insurance for third party can be more expensive than comprehensive insurance in certain cases. 

When Is Third Party Car Insurance a Good Option?

You may want to consider third party car insurance if you get a quote that’s cheap (cheaper than comprehensive insurance) and you can afford to cover any expenses that it wouldn’t cover. 

For example, if your vehicle has a low market value and is cheap to maintain and fix, you could look into third party insurance cover.

Bottom Line

Third party car insurance is a type of insurance that covers the cost of any damage or injury that a third party sustains as a result of an accident that was your fault. This type of insurance offers the minimum level of cover and won’t cover you for your injuries or damage to your vehicle.