Complete Guide to Car Insurance: the Coverage and the Types

If you’re going to drive on British roads, then you’ll need to be insured. There are, however, many different levels and varieties of insurance on offer, and before you decide to invest, it’s worth researching your options.

Types of Coverage

For the most part, you can think of vehicle insurance as falling into three distinct categories.

complete guide to car insurance
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Third-party Liability

This is the bare minimum. It will protect third parties against damage caused by your vehicle. This includes the cost of replacements and repairs to damaged vehicles and property and any liabilities which come from deaths and serious injury.

Third-Party Fire and Theft

This will cover all of the above, as well as damage and loss suffered by you as a result of fire and theft.


As you might expect, this is the most complete form of insurance. It will protect against injuries and death suffered by the occupants of your car, the theft of property from your car, medical expenses, and courtesy cars while your car is being repaired. The extent of your coverage will depend on the individual insurer, so it’s worth checking the small print.

Factors which influence the price of your premium

Insurers will charge you according to the risk that they perceive that they’re assuming. They can guess this by making assumptions about you based on your characteristics – though they have to remain on the right side of discrimination law.

You can often secure a discount by insuring multiple cars simultaneously. Multi-car insurance therefore tends to work out cheaper than taking out many separate policies.

Younger drivers are more likely to be involved in an accident and make a claim than older ones are, and therefore they must pay proportionally higher premiums.

The type of car being driven matters. High-performance sports cars tend to be more expensive to cover than smaller, more practical city cars.
Similarly, a clean driving record might indicate a more reliable driver. If you’ve got points on your license, then you’ll pay more. If you’ve made a claim before, then you’ll tend to be punished for future claims.

The number of miles you’ve driven makes a difference. The more you’re driving, the greater the wear and tear on your car, and the more likely you are to be involved in an accident.

Your location matters. If you live in a statistically crime-prone neighbourhood, then you might expect this to be reflected in your premium.

The place that you park will make a big difference. If you’re on the street, then you’ll pay more than if you were parked on a drive. If you’re in a garage, then you’ll pay the lowest amount.

Jasper has been an enthusiast of the automotive and IT industries since the age of 16. He independently writes on the auto industry's recent happenings.