Car Insurance

Unlike other types of insurance like pet or health, this is one type of insurance you must have by law if you drive a car on the roads. 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. Quite simply, other people must be protected against any damage caused by using a vehicle. By being insured, the car driver protects innocent parties against costs due to injury, damage to their vehicle, and legal costs.

• Types of car insurance

There are three main types of car insurance:

• third party
• third party fire and theft
• comprehensive insurance cover

• Third party only
Third party is the minimum legal level of insurance you can take out. ‘Third Party Only’ 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 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 won’t get any money back if your car is stolen either.

• Third party fire and theft

‘Third Party Fire & Theft’ is similar to ‘Third Party Only’ 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.

• Comprehensive

Just as its name suggests, comprehensive car insurance provides a high level of cover and if your car is worth more than £5,000 then you’d have to choose this type anyway.
You will usually be covered for everything that a Third Party Fire and Theft policy would cover but even better. 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.

news source : http://financialadvice.co.uk/news/