The 3 Levels of Car Insurance in the UK

Two Drivers Arguing After Traffic Accident - Copyright : Cathy Yeulet

Overview of Car Insurance in the UK

You are planning to get a British driver’s licence and drive in the UK. Now, before you start to drive you must have a car insurance. But what type of insurance do you need? Do you understand the local car insurance laws in UK?

A car insurance is mandatory in most countries. The confusing thing about auto policies, however, is that the rules and types of insurance are different in every country. What’s required in some places is simply recommended in others (and vice-versa). If you just moved to the UK, you need to familiarize yourself with these differences.

Here is an overview of the three major levels of car insurance that you will encounter when living in the UK.

The Minimum Level of Car Insurance Coverage (TPO)

The minimum level of car insurance coverage required by law in the UK is called Third Party Only (abbreviated TPO). This type of car insurance covers the driver against any damages they cause to someone else’s property in the event of an accident.

If you are covered by TPO insurance and crash your car into another car, a person, a building, or any other type of “third party” property, then your policy will cover the costs of repairing said property, but it won’t be responsible for paying any expenses you may incur as the at-fault driver.

Put plainly, your insurance will pay to make repairs to vehicles you have damaged and pay the medical bills of the other drivers, but you will be left to foot the bill for repairing your own car and/or your own injuries. It’s considered risky to just carry TPO coverage, and it is rarely recommended.



Third Party Fire and Theft (TPFT)

An insurance policy that covers Third Party Fire and Theft has all the same benefits of a TPO policy first and foremost. TPFT policies extend their coverage slightly, however, in that they also cover your vehicle against damages that are incurred in the event of a fire as well as the value of your car if it is stolen.

Even though it may seem like the additional coverage is relatively minimal, TPFT policies tend to be much more expensive than TPO policies, especially if your car is worth a lot of money. The chances of your vehicle catching fire or being stolen are slim, but if it should happen, your insurer will be responsible for paying the entire value of your car, so you will notice a big difference in your premiums to represent this added protection.

How much you pay for your TPFT insurance will also depend heavily on where you live and how your car is protected when it’s parked. Residents of dangerous neighborhoods are much more likely to have their cars stolen, so you will need to pay more for coverage – especially if you park your car on the street. Conversely, if you install an anti-theft system like an alarm or an immobilizer, you will likely see the cost of your TPFT policy drop.

Comprehensive Coverage

While TPO and TPFT policies are rather limited in their scope of coverage, a fully Comprehensive insurance policy will protect you against almost anything that may happen to you or your car.

Comprehensive policies cover the damage that may befall your vehicle if you are responsible for an accident. They also cover you if the car is broken into or damaged by the elements such as hail or falling tree limbs.

Your own medical bills and vehicle repairs will be covered as necessary, even if you are at fault, which makes it the safest type of coverage for you to carry.

Within the umbrella of Comprehensive insurance policies, there are several add-ons that your provider may or may not include. Among them are coverage for the personal belongings you keep in your car if it is broken into as well as replacement locks or windscreen if they are damaged. You should also inquire about whether your policy covers the cost of a hotel room if your car is damaged while you are traveling as well as free car hire while your vehicle is being repaired.



Your Choice

The amount and type of car insurance you buy will ultimately come down to personal preference, and you may decide that you prefer the cheaper price tag of TPO or TPFT to the more expensive Comprehensive coverage. Regardless of which type of policy you choose, however, you can now have an overview of the basics behind car insurance in the UK.


Photo Copyright: Cathy Yeulet

Text by: Taylor Roberts