Basic Car Insurance Can Be More Expensive Than Comprehensive Coverage

Which? Money recently found that basic third party, theft, and fire auto insurance policies may be only slightly cheaper or even more expensive than comprehensive coverage. The company used two demographic scenarios on two auto insurance price comparison sites to reach its conclusion.

In one case, the least expensive comprehensive policy was only £3 more than a third party, theft, and fire policy from the same insurer.

Comprehensive policies include a greater level of coverage such as a courtesy car. It is surprising that some cost only a bit more than a basic policy. What is more amazing is that basic policies that cover third party only can be much more expensive than comprehensive policies.

For example, one site provided a third party quote of £349 with no excess, while the comprehensive coverage was just £247 with a £100 excess.

One comparison site revealed that quotes from one carrier were the same for third party, theft, and fire, comprehensive, and third party only. In various scenarios, comprehensive policy quotes were a bit less expensive than third party, theft, and fire.

The results depended on the vehicle, however. A comprehensive quote for the Audi A6 was more expensive than third party, theft, and fire.

An Association of British Insurers spokesperson said the reason third party, theft, and fire premiums are often higher than comprehensive premiums is because younger drivers tend to choose the first type of policy. These drivers make larger claims.

For an individual driver with more experience, third party coverage should be cheaper.

Whether they take out car loans or pay cash, those who recently purchased a car should compare price quotes for comprehensive and third party, theft, and fire policies. Depending on the vehicle and driver age, comprehensive may be a better deal.

In addition to a possible lower price tag, this policy includes more coverage.