If you are looking for insurance to cover your car, yourself and other people in your vehicle or on the road, understanding car insurance is a vital requirement. Generally speaking, you can get car insurance to cover the following aspects; the insured vehicle (any physical damage caused to the car), the insured party (any medical costs that accrue as the result of an accident) and third parties (covering any other vehicles involved in a crash for physical damage and any other people for their injuries). However, the level of cover that you will get will largely depend on the insurance policy that you opt for, and that’s why understanding car insurance can sometimes get a little confusing.
When you are looking to understand car insurance, there are two main types of car insurance policy to consider. The first, and perhaps the most popular car insurance option, is third party, fire and theft insurance. This kind of insurance policy is the minimum level of insurance cover that is most commonly purchased. Although third party, fire and theft car insurance is basic, it does exceed legal insurance requirements in the UK. With third party, fire and theft insurance you will be covered against any liabilities to third parties, along with cover for the theft or destruction of a policy holders vehicle by fire (whether this be via malicious means or due to a fault with the vehicle), however, it will generally not cover you for any other risks, such as vandalism or damage caused to the vehicle by the driver.
The second type of commonly-purchased car insurance is comprehensive insurance. This kind of insurance policy will cover you for all of the previously listed occurrences, as well as covering any damage that is caused to the vehicle by the driver. Comprehensive insurance policies will also cover you against vandalism and a range of other risks. To this end, comprehensive insurance is more expensive than third party, fire and theft insurance, but it is the preferred option for anyone who wants a full-inclusive policy i.e. anyone with valuable cars or frequent drivers.
When you are looking to understand car insurance, it’s also important to know how excess payments work. An excess payment (sometimes referred to as a deductible) is a fixed contribution that must be paid whenever a car is repaired and the charges are billed to a car insurance policy. This payment is normally paid directly to the accident repair centre/garage upon collection of the car. Should a car then be declared as being a "write off" following an accident (i.e. if it is damaged beyond repair), the car insurance company will deduct the agreed excess on the insurance policy from the payout it makes to the owner. However, if the accident was deemed to be the fault of another party, and this is accepted by the third party's insurance company, the owner of the vehicle may be able to reclaim the excess payment from the other party’s insurance company.