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What is third party car insurance

It used to be the case that third party policies were relatively cheap options, but fewer and fewer car insurance companies are now offering them, and the justification they give for this is that we have now reached the stage in which one of these policies can actually cost more than a comprehensive one, and therefore there is no point in buying one. This is completely twisted logic.

It is probably correct that the average third part policy is at least almost as expensive as the average comprehensive policy but this is because the people who buy them are usually younger drivers, with cheaper cars. Since younger drivers have a much higher accident record than older ones, this is business which a large number of insurance companies now prefer to avoid so they have either pulled out of this section of the market or put their prices up considerably. The truth is therefore, that the reason why there is little difference in cost between the two is because TP has been made more expensive relative to comprehensive, and it has become more expensive because customers who buy it have, as a group, more claims than drivers who buy comprehensive cover for their more expensive cars.

This is not to say however that third party fire and theft policies are completely unobtainable, they are still available from a lot of sources but you may well find it worth your while getting a quote for a comprehensive policy as well. It is unlikely to be cheaper but you may decide it worthwhile paying the extra in order to enjoy the extra benefits.

It is just as important when you are comparing quotations for car insurance to look at the excess charge; in other words the

sum that you have to pay for every claim out of your own pocket. Many of the cheaper quotations that you see will be from companies that insist on as much as ВЈ500 compulsory excess, and sometimes substantially more. Since many insurance companies with much lower compulsory excesses offer quite substantial discounts to clients who voluntarily accept higher ones the cheaper quotations may not look such a good bargain after all. Another way that some companies use to squeeze even more money out of their clients is to build substantial charges into the contract for any changes that have to be made during the life of the policy. There are some companies that would charge well in excess of ВЈ100 just for recording a change of address, secure in the knowledge that if the client didn't tell them about the change it could invalidate the policy, and give them a good excuse not to pay out in the event of a claim. A third trick which is all too common is to get people who sign up online to agree to pay future renewals by direct debit. This means that when a new, and no doubt more expensive, premium is offered a year later it is much more likely to be accepted automatically by the customer, even though there may be far better or far cheaper options available from other companies.

It is clear to see that whereas buying insurance used to be a simple matter of choosing between an economical third party, or third party fire and theft policy, and a more expensive comprehensive policy, it is now advisable to look at what is on offer a lot more carefully as car insurance companies become more crafty.

Copyright Steven Cameron 2013 All Rights Reserved

Category: Insurance

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