Third Party Only Insurance Explained

from confused.com

(applicable to the UK)

For a motorist to drive on UK roads, it is a legal requirement to have at least third party only (TPO) car insurance. This is to ensure that third parties involved in an incident are protected. So, for example, if you were to crash into another car and the accident was deemed to be your fault, then your liability to the driver of the other car would be covered, although you would not be able to claim for damage to your own.

Drivers may seek out third party only motor insurance because it more often than not has the lowest cost premiums. This is particularly the case where the driver is considered by the insurance company to be a high risk, or the car value is low so low it is unlikely to get a pay-out through an insurance claim.

Therefore it is worth bearing in mind what third party only does not cover before deciding which level of cover to take out. Third party only will not cover a car in the event that it is stolen or burnt by fire. To protect against such losses, a driver may choose to upgrade to third party, fire & theft. Comprehensive cover will see your car repaired in the event of an accident (or pay you the vehicles value if it is uneconomical to repair).

Third party only will, however, cover you for any injury or even death caused to third parties. It will also cover your legal costs in the event of such proceedings, but not any fines you may incur.

One should most certainly not take out this level of cover if the car is new, has a high value (in monetary terms and in personal terms for you) or has been purchased on credit. In these circumstances, it is wise to take out comprehensive cover.

It is worth noting that some insurance companies will insist on third party only cover in some circumstances, and not offer comprehensive or third party, fire & theft. An example of this might be where a car is over thirty years old. This is because replacing car parts which are no longer readily available would be very expensive for the insurance company. As such, they may recommend going to specialist or classic car insurers, or offer no more than third party only insurance.