Third party, fire and theft car insurance

Third party cover means that you are covered for any damage you may cause to another party in a claim e.g. the damage to a car you drive into. It also covers your vehicle against fire damage and if it is stolen.

If you have an accident that isn’t your fault, the other party’s insurance will pay for any damage to your car, including paying for a replacement if your car is deemed a write off, and for any medical expenses arising from any injuries you sustain in the accident.

If the accident is your fault, you will have to pay for any repairs to your own car yourself, as your insurance won’t cover it.

Note that if you make a claim for theft or fire on your policy, the chances are you’ll have to pay an excess. This can be anything from £50-£500 so if you’re driving an old banger that you got for £150, a claim for fire or theft is pointless, especially as it’ll affect your no claims bonus.

There are no hard and fast rules as to who should get third party, fire and theft insurance. But some people will benefit from this kind of cover. Just remember that third party, fire and theft insurance won’t pay for damage to your own car if you’re at fault in an accident, and if it’s a write off, you’ll have to fork out for the cost of a new car yourself.

It’s worth considering if:

• you’re under 25 – young drivers are statistically more likely to be involved in accidents so comprehensive premiums are high
• your car has a low value – weigh up the cost of premiums against the value of your car
• you have a history of claims where you were at fault
• you have zero no claims bonus (NCB) – even one year’s NCB can get you substantial savings on your premium
• you’ve had a driving ban or have a lot of endorsements on your licence
• you live in a ‘high risk’ area e.g. London

But, because third party, fire and theft car insurance doesn’t insure you against personal loss as a result of an accident that was your fault, it’s not recommended if:

• your car is worth over £5,000 – the cost to you of repairing or replacing your car would be a lot more than the cost of a year’s comprehensive cover
• you’ve bought your car on finance – if you’ve taken out a loan to buy your car and the car is written off before the loan is repaid in an accident that was your fault, only comprehensive insurance will pay out the value of your car
• you buy a brand new car