What type of car insurance do you need?

The law only requires you to have third-party car insurance, which pays out to someone else whose car or property you damage. But it’s always worth checking out other options - extra cover may actually be cheaper.

Many drivers choose third-party - or third party, fire and theft - thinking it will be the cheapest way to get covered. But fully comprehensive insurance provides the broadest protection, including damage to your own vehicle, and is often the cheapest option - despite providing the greatest amount of cover.

Think about your car’s value, how much you rely on it, and how much risk you’re comfortable carrying yourself. If you drive an older, cheaper vehicle, you might decide minimal cover is enough. But if you’d struggle to afford repairs or a replacement, a comprehensive policy could give you better peace of mind - and may be cheaper.

How car insurance protects you

Car insurance is about more than just meeting legal requirements – it’s there to protect you and your car, and give you peace of mind on the road. Here’s a snapshot of how it helps when disaster strikes.

Financial protection

Covers most of the costs of repair or replacement after theft or an accident.

Peace of mind

Drive confidently knowing you’re protected if you have a bump.

Accident support

Expert guidance from the insurer after a collision or accident.

Keeping you moving

Policies often include the cost of a hire car so you can stay on the road.

Choice of repairers

Some policies let you choose where your car is repaired, giving flexibility and control.

Legal reassurance

Support with claims, liability and legal complications.

Which car insurance policy is right for you?

Fully comprehensive

This is the most complete option, covering damage to your own car as well as other people’s property. It also includes fire and theft protection, and in some cases can offer additional benefits like roadside assistance or windscreen cover.

Third-party insurance

This is the most basic type of cover and protects you if you cause damage to other people or their property. It won’t cover any damage to your own car, but it meets the legal requirement for driving on UK roads.

Third-party, fire and theft

This level of cover includes everything third-party insurance offers, plus protection if your car is damaged by fire or stolen. It’s a step up in security, giving you extra peace of mind.

Ways to reduce your car insurance premiums

Looking to bring your car insurance costs down? The good news is there are practical steps you can take right away that could help lower your premiums or save money if there’s a claim:

  • Increase your voluntary excess: Adding a voluntary excess can lower your premium. Just make sure it’s an amount you could realistically pay if you ever need to claim.

  • Boost your car’s security: Cars with alarms, immobilisers or trackers are seen as lower risk. If yours doesn’t have one, fitting approved security could bring your costs down.

  • Pay annually instead of monthly: It might feel easier to spread the cost monthly, but insurers often add interest or admin fees to instalments. If you can afford it, paying your premium in one go is usually cheaper overall.

  • Avoid auto-renewals: When it comes to car insurance, loyalty isn’t always rewarded. Switching insurers could save you money, so check your renewal quote against the market before letting it roll over.

Compare insurance for different driver types

Compare insurance by car types

Common myths about car insurance

There’s some confusion out there about what car insurance actually covers. Understanding the facts can help you make smarter choices and avoid unnecessary costs.

  • Third-party policies are the cheapest: Not always. Comprehensive cover is often cheaper than third-party, while also protecting your own car. Always compare quotes across cover levels to find the best deal.

  • Parking in a garage always lowers premiums: Parking in your garage doesn’t always reduce your premium. The difference may be small - or it may even be more expensive to park in your garage. That’s because insurers often have to pay out claims from people scraping their car on garage walls, and even garages collapsing on top of cars. That said, street parking is usually the riskiest option.

  • Fronting is easy to get away with: Fronting is when a ‘named driver’ uses the car more than the person declared as the main driver. It’s illegal, can invalidate the policy, and is something that insurance companies are very good at detecting. We advise you not to do it!

  • All ‘extras’ are unnecessary: Optional features like breakdown support or legal assistance provide extra protection and peace of mind when the unexpected happens. They may seem unnecessary, but do weigh up the cost and potential benefit before deciding.

  • Car insurance companies don’t know your accident history: Any claim you make is automatically recorded with the Claims and Underwriting Exchange (CUE), where it stays for six years. Insurers can access this information, so past accidents are visible, and failing to declare them could invalidate your policy.

Car insurance guides

Answering your questions about car insurance

Page updated on 9th October 2025, Reviewed by Richard Groom