When it comes to car insurance there are two main distinctions - fully comprehensive insurance and third party. Essentially, the difference between the two is the amount of cover you receive.
Basic, Budget Car Insurance
Third party insurance is a basic type of cover that is designed for those on a small budget. It is designed to protect other road users that may incur damage to their car or personal injury as a result of an accident caused by yourself. Third party insurance is ideal for first time drivers who have no claims history, making fully comprehensive insurance too expensive. It's also ideal for those of you who drive old cars with little value as sometimes the cost of insuring fully comp outweighs the cost of your actual car!
Your Car Isn't Covered
The downside to third party insurance is that it offers no protection for yourself or your car if you were to have an accident. If you drive an expensive car then fully comprehensive insurance is recommended. Likewise, if you need your car for work, or can't afford to buy another one - then in the long run taking out fully comprehensive insurance maybe your best bet. It also gives you peace of mind that if the worst was to happen, you would be protected financially.
3rd Party Fire and Theft
If you are looking for something in the middle then consider Third Party Fire and Theft (TPFT). As the name suggest, not only are you covered against damage to third parties but also covers your car if it is stolen or damage by attempted theft or fire. This type of cover should be a consideration if you leave your car on the road over night or live in an area with lots of car crime. Unfortunately, not all car insurers offer TPFT, others will only provide the cover if your car is below a certain value - usually £5,000.
Optional Extras Can Add Cost
As with other types of car insurance, there are a number of optional extras to choose from with third party cover. This could include breakdown cover, windscreen cover and legal cover if it's not already included. Third party insurance also allows you to build up your no claims history which would mean that if, in the future, you decide to go for comprehensive insurance then your premiums would be lower.
In conclusion, third party insurance is best suited to those who have just started driving or are on a strict budget. If you have a no claims bonus and have experience on the road then opting for fully comprehensive is advisable.