Types of U.K. Car Insurance Coverage Explained

The U.K. Road Traffic Act of 1988 (Section VI, see References) specifies that car insurance is mandatory for any vehicle driven on a public road in the U.K. There are three standard types of car insurance in the U.K., plus two that are lesser known.

Third Party Insurance

Third Party is the cheapest, but most basic, insurance. It covers damage to other vehicles and injury to passengers in the insured's car only.

Third Party Fire and Theft Insurance

Third Party Fire and Theft provides additional insurance should the vehicle catch fire or be stolen. It is more expensive than Third Party only.

Comprehensive Insurance

Comprehensive provides the most complete insurance coverage, though it is the most expensive. It covers third party, fire, theft and many other occurrences, for example broken internal equipment or windscreens. Some policies cover the driver when driving someone else's car.

Classic Car Insurance

Specifically for vintage cars, classic car insurance is available only for older vehicles.

PAYD (Pay As You Drive) Insurance

A newer form of insurance, PAYD is based on a vehicle's GPS system. Insurance is levied based on miles driven, the location of the car and the time of day the vehicle is driven.

References

• The U.K. Road Traffic Act 1988

Resources

• Motor Insurance Bureau