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Car insurance

Unlike most other types of insurance, drivers in the UK are required by law to possess car insurance that covers them for the car they are driving. The Road Traffic Act 1988 says that you must have some kind of insurance or protection against liability to third parties in the event that personal injury is inflicted upon them, or that their property is damaged, as a result of your use of the road. By being insured, the car driver protects innocent parties against costs that could be inflicted from injury, death, damage, theft and legal costs.

Types of car insurance

There are three main types of car insurance:
• Third Party
• Third Party Fire and Theft
• Comprehensive

Third Party
Third party is the minimum legal level of insurance you can take out. Third Party insurance only covers damage or injury caused to someone else, including passengers. It doesn't provide any cover at all for your own car or property. So if your own car is in an accident and needs to be repaired, you'd have to either pay the repair bill yourself, if you are responsible (legally viable), or claim from the other party if they are responsible. You will not be able to claim any money from your provider in that event that your car is stolen or set on fire either.

Third Party Fire and Theft
'Third Party Fire & Theft' is similar to 'Third Party', but also covers your losses if your car is stolen or catches fire. Again though, just like third party, it doesn't cover you against accidental damage.

Just as its name suggests, comprehensive car insurance provides a level of cover that means whatever happens to your car, you will be covered for the repair or replacement costs, unless you are in breach of the conditions of the policy. It will pay out, up to a certain limit, if you accidentally damage your own vehicle and lose or damage your personal belongings from the car.

Broken/damaged windscreens will usually be covered too. You can also opt - or it is sometimes included - to add 'personal accident' or 'medical expenses' cover to your policy. Paying an excess on comprehensive policies helps to bring the monthly premium price down.

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