What do I need to know before comparing car insurance quotes?

To obtain a meaningful comparison of car insurance quotes it’s vital to ensure the comparison is like for like, not apples and oranges.

Thanks to the internet it is now easier and faster than ever before to obtain motor insurance quotes and evaluate which represents the best value for money. Of course, as is so often the case, cheapest is not always the best. What may sound like a good deal isn’t necessarily so if it’s full of qualifications, exclusions and hefty excess fees.

Since the 1930s it has been the law in the UK that all drivers must be insured before taking to the road. Before comparing quotes, though, an appreciation is required of the different types of car insurance available. There are three main types widely available in the UK .

The first is Third Party Only. This is the bare minimum allowed by law and is very limited in its scope, covering the policyholder only for the cost of damage to a Third Party’s property or injury to a Third Party. (By way of explanation, the First Party is the policyholder, the Second Party is the insurer and a Third Party is anyone else) Be aware, however, that Third Party Only does not cover damage to you or your vehicle.

Next is Third Party, Fire and Theft. This is basically the same as Third Party Only but with the addition of cover against your car being stolen or catching fire.

Thirdly, there is Fully Comprehensive. This is normally the most expensive option as the policyholder is purchasing wide-ranging insurance cover offering protection against not only Third Party claims but also damage to the policyholder, the policyholder’s vehicle and passengers in the event of an accident regardless of fault.

Most Fully Comprehensive policies offer additional benefits like glass cover, medical expenses and legal assistance but policy benefits do vary from company to company.

The British Insurance Broker Association (BIBA) suggests a good comprehensive car insurance policy should address the following:

Cover for a spouse or named driver
Third Party repairs
Third Party courtesy car
Cover to repair or replace the policyholder’s vehicle
Third Party liability
International driving Green Card and insurance cover for driving abroad

The level of insurance protection and the benefits offered obviously have a major bearing on the cost quoted by a car insurance company. It would therefore not be a particularly useful exercise to compare a Third Party Only quote with a quote for Fully Comprehensive car insurance. Also, no two drivers are alike, so quotes can vary wildly for car insurance as there are many factors that come into play – not just the policy type – in determining the premium price.

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