Can you save by buying third party car insurance?
Once upon a time the majority of motorists bought third party fire and theft (TPFT) insurance, purely and simply because fully comprehensive insurance was so much more expensive. Then two things happened; cars became far cheaper in real terms, and the Internet came along making car insurance a much more competitive business. This meant that even the least well off members of society could often be able to afford to run a car. Because these cars were not usually worth a great deal it made a lot of sense for them to get the cheapest possible insurance on them, which was third-party only.
Unfortunately – and it may not be politically correct to say this, even if it is true – the type of clients who bought third-party insurance were often far less careful in maintaining and generally looking after their cars than their more affluent counterparts. A higher than average number of vehicles were abandoned, stolen or vandalised leading to stonking great losses for a lot of insurers. In addition many younger drivers chose the cheapest possible cover out of sheer financial necessity, and it is a sad fact that younger drivers ON AVERAGE tend to have more accidents, and more serious ones, than older drivers with more experience. Not surprisingly, It was not long before insurers started to realise that this was a market they didn"t really want to be in.
As a consequence, whilst comprehensive car insurance premiums increased over the years, the premiums for TPFT rose at a slightly higher rate whilst third-party only rates went up by much bigger leaps and bounds and so we are now at a crazy stage where anyone who buys one of these policies could well be paying several times as much as people who had comprehensive policies, even though those third-party policies offered far lower benefits.
From a purely financial point of view fully comprehensive cover is often a better deal for both the insurer and the insured. The client knows that if the car is badly damaged or written off in an accident the insurer is likely to meet at least most of the cost, and the insurer knows that the car owner who takes out one of these policies cares enough about the car to spend a little extra to protect it, and is therefore likely to be at far less risk of being involved in an accident than someone who didn"t give a fig about it.