When it comes to car insurance, third party cover is generally the cheapest and most basic type of car insurance. With this type of insurance, you are only covered for any damage done to the vehicle of a third party, as well as any injuries incurred by the third party involved in the accident. Your car is not covered in the event of it being damaged by fire or if it is damaged as a result of an attempted theft.
For example, if you have third party cover and you were to crash into another car, then your liability towards the driver of the other car would be covered, but any damage to your own car would not be.
Third party cover is often chosen by drivers because it is the cheapest option which offers the lowest premiums. This is particularly common where a driver is considered by the insurance company to be a high risk, or the car is so low in value that it is unlikely to get a pay-out through an insurance claim.
Before making the decision to opt for third party cover, it is important to consider what this type of insurance does not offer. The fact that it does not cover damage to your car caused by fire or theft, could result in big losses. For this reason, drivers often upgrade to Third party, fire and theft cover which includes cover against damage caused by fire and theft.
If your car is new or has a high value, then it is not wise to take out third party cover. It is a better idea to opt for comprehensive cover. The reason for this is that if you are in an accident, you will end up having to pay for damages to your car out of your own pocket. This can prove to be extremely costly, so it is just not worth the risk. If your car, however, is low in value, then opting for third party cover may not be too risky. One way of working it out, is to consider how much it would cost to make a claim against the cost of replacing your vehicle. In some situations, the car insurance excess and increased premiums for the next 5 years are more expensive than replacing a low value vehicle yourself, so in this scenario third party cover should be considered.
Overall, make sure that you do your research before deciding on the right cover for you.