If you are a new driver, you’re likely wondering how car insurance works. While most people know they have to make a periodic premium payment to the insurance company for continuous coverage, not many know the nitty-gritty of what exactly car insurance plans cover. That’s why we’ve put together a concise guide to explain what typical car insurance plans offer as coverage.
Coverage offered by car insurance plans
- Third-party coverage: In the UK, third-party insurance is the minimum coverage that all drivers are required to have by law. Thus, you cannot drive your car unless you at least have a third-party plan. This form of coverage only covers damages caused to third parties either by you or your passengers. It doesn’t cover damages to your vehicle, theft of your vehicle, or fire damage.
- Third-party, fire and theft coverage: This type of coverage is quite similar to the third-party-only cover. However, it also offers protection in case a fire damages your vehicle or if your vehicle is stolen.
- Fully comprehensive coverage: This is the highest level of auto insurance you can opt for in the UK. In addition to what is covered by a third-party, fire and theft plan, this type of policy also provides financial coverage in case your vehicle needs to be repaired or replaced, even if you were the at-fault driver. If you are the primary policyholder, most comprehensive plans also cover you when you are driving other people’s cars, provided you have their permission to drive their vehicle. But, the coverage you get when driving another individual’s vehicle is third-party only.
Extras that you can opt for
If you buy a comprehensive car insurance plan, you can opt for a whole lot of add-ons for additional coverage. Some of these extras may be provided by the insurance company for free, while other options may be available for an additional premium. These add-ons could provide coverage in case of breakdowns, personal injuries, theft or loss of keys, etc. Before you purchase a policy, it’s a good idea to check what coverage is offered free of charge since the policy coverage usually differs from one plan to the other.