Car insurance being reduced to third party, fire & theft

As the recession takes a hold, many are cutting their car insurance to third party only or third party fire and theft insurance cover to save money.

According to uSwitch.com, 20% of drivers who have third party car insurance now cannot afford comprehensive cover.

A further 6% have recently downgraded from comprehensive cover to save money and keep their vehicles on the road.

Worryingly though some 34% of motorists don’t understand what third party car insurance actually covers then for:

• 7% wrongly believe it covers then for damage to their own vehicle but not others involved in an accident
• 7% wrongly believe they are covered for both damage to their vehicle and to any others involved in an accident.
• 20% actually admit they don’t know what the cover provides

Fundamentally, with third party insurance, if the policy holder is involved in an accident, only the damage caused to other vehicles is covered, not the damage caused to their own vehicle.

See our MoneyHighStreet article on Understanding the type of car insurance you need for more help in this area.

Insurance expert at uSwitch, Mark Monteiro, said ‘a third party level cover could prove a false economy in the event of an accident, as a motorist is in danger of having the amount saved on the premium completely wiped out by the cost of any repairs to their vehicle.’

There are a number of car insurance comparison websites, such as uSwitch.com, Gocompare.com and ComparetheMarket.

Using these, you can compare car insurance quotes quickly and easily, for example seeing the difference between third party and comprehensive car insurance costs across a range of providers.