It might surprise you to hear that there’s more than one type of car insurance policy available. For the most part, you’ll grab comprehensive insurance every year – but is that always the right idea? When it comes to saving money and managing unnecessary expenses, it pays to consider the different types of car insurance and whether or not a different option makes sense for you.
Comprehensive Car Insurance
Comprehensive insurance will cover just about everything. This includes:
- Damages to your car
- Any third party damage
- Vandalism
- Theft
- Fire damage
Most comprehensive car insurance policies also include windscreen cover so you can repair or replace your windscreen due to chips, and some even include legal fees, courtesy cars and more. It’s literally the best type of insurance if you need maximum protection – but it will often be the most expensive.
Still, you should consider this if your car if valuable, just follow a few tips to find cheaper comprehensive insurance premiums:
- Remove any optional extras if you don’t deem them necessary (like legal cover or a courtesy car)
- Be smart when adding your mileage as you’ll overpay if you put too many miles down and never get anywhere near that distance each year
- Think about taking out a policy with a black box to monitor your driving – they are always considerably cheaper
Most people will need comprehensive insurance for most cars, though you can still make it more affordable. That being said, there are plenty of cases when you may suit a different type of insurance.
TPO (Third Party Only)
Easily the cheapest type of car insurance you can find, and that’s because it only covers damage to someone else’s vehicle or property. You won’t be covered for any repairs to your car in an accident – so why bother with this at all?
Well, it can be a great way to save money on car insurance if you don’t care too much about your vehicle. This makes sense if you’ve got an old car that’s on its last legs and you’re probably going to get a new one within the next year. Why bother forking out for comprehensive insurance if you can save money with TPO?
Similarly, it’s a sensible decision if the cost to repair your car is worth more than the value of the car itself. In cases like that, you’re wasting money on comprehensive insurance because there’s no point ever making a claim for damages to your vehicle. It’ll cost more to fix than it will to scrap – so opt for TPO to save money.
Please, please, please keep in mind that this only makes sense when your car isn’t very valuable or you’re happy writing it off if you ever get in an accident. Do not get TPO for brand-new or valuable cars; that will be a grave financial mistake!
TPFT (Third Party, Fire & Theft)
TPFT is a step up from TPO yet one down from comprehensive on the car insurance ladder. You’ll be covered for:
- Damage to your vehicle
- Damage to other vehicles
- Theft
- Fire damage
All in all, a pretty decent insurance option that normally works out cheaper than comprehensive. The only downside is that you’re not covered for non-fire accidental damage. That includes windscreen chips, little bumps and knocks, etc.
As such, it usually only makes financial sense and will save money on mid-value cars. We’re talking something that’s not old enough to be worth nothing, but not new enough to be worth getting comprehensive car insurance for.
Temporary Car Insurance
Last but not least, you’ve got temporary car insurance as a consideration. Most of the time this is offered as comprehensive insurance that covers everything – though there’s one big difference: temporary insurance only lasts between a few days and a month.
It only exists as a temporary option (hence the name), which is useful when:
- Borrowing someone’s car for a couple of days
- Lending your car to someone
- Insuring your child when they visit from university for a few weeks
- Driving a car home from a dealership/test driving cars
- Driving a car that most stays parked for the rest of the year
In any of those cases, temporary insurance is the right choice – and it will be way more affordable than taking out an annual comprehensive policy with other people on it.
After looking at these insurance types, which one is right for you? Mostly, you’ll drift to either comprehensive or temporary, depending on your vehicle. However, if you’ve got an older car or are planning on buying a new one and scrapping your one soon, then consider TPO or TPFT to save a decent bit of cash.
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