A Simple Guide To Your Car Insurance Options In 2023

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Car Insurance

It’s one of those things that takes money out of our pocket every month, but very few of us fully understand.

Here’s the bottom line:

The cost of living crisis in the UK is hurting all of us, so it’s never been more important to shop around to secure the best deal.

But choosing the correct car insurance and, more importantly, the cheapest policy, doesn’t have to be confusing in 2023.

Think about it.

There are only three main types of car insurance in the UK:

    1. Fully comprehensive,
    2. Third-party fire and theft,
    3. Third-party only.

Each one offers a different level of coverage, and understanding these differences is key to making an informed decision.

And the best bit?

We’ll explain everything you need to know – in clear, easy-to-understand terms – in the next 3 minutes.

Let’s dive in.

Understanding Car Insurance

Simply put:

It’s a contract between you and an insurance company. You pay a premium, and in return, the insurer agrees to cover certain costs if you’re involved in an accident.

But here’s the thing:

Not all car insurance is created equal.

And in my humble experience, not all car insurance companies are created equal either, for that matter.

More about that later.

There are, of course, hundreds of car insurance policies and providers operating in the UK.

In other words:

Spending just a few minutes understanding how the car insurance market works can save you a fortune in 2023.

Let’s break it down.

Fully Comprehensive Insurance

First up, we have fully comprehensive insurance.

As the name suggests, this type of car insurance offers the highest level of coverage. It includes damage to your own car, even if an accident was your fault.

And it doesn’t stop there.

It also covers accidental damage, vandalism, and loss or damage due to theft.

Think about that for a minute.

Imagine you accidentally reverse into a lamp post. With fully comprehensive car insurance, your insurer will cover the cost of repairs to your car.

Even better:

Although fully car comprehensive insurance is typically the most expensive type of cover, it’s not always the case.


Because of the high level of competition in the UK car insurance market, a fully comprehensive policy can – believe it or not – sometimes be cheaper than third-party options.

Okay, I know what you’re thinking:

If it’s possible to find fully comprehensive car insurance that is cheaper than the other types of policies, why bother searching beyond your first quote?

Well, after more than 10 long years of running the cheap car insurance website, it’s fair to say that I’ve learnt a thing or two about saving money on your car insurance.

In fact, do you want to know a secret?

In my experience, it pays (big time) to always shop around and compare quotes from different providers, no matter how cheap you think your policy is.

I’ve seen savings of up to £500 per year, with just a few more clicks of the mouse on price comparison websites such as ours.

The truth is:

Whilst fully comprehensive car insurance is, on the whole, the most all-encompassing type of policy, some of the best deals are only available with lower coverage options.

This leads me to…

Third-Party, Fire and Theft Insurance

This type of car insurance provides a watered-down version of fully comp.

Simply put:

It protects your vehicle against fire and theft, as the name suggests. A significant selling point, considering that car theft rates are currently through the roof in the UK.

It also provides covers if other people claim against you for injury or damage.

Pretty cool, huh?

Not so fast.

Third-party fire and theft car insurance will not cover the costs of repairing or replacing your car if it’s involved in an accident.

That’s a crucial difference to consider when comparing the cost of fully comprehensive policies.

But hey, third-party fire and theft still covers the majority of ‘what if’ scenarios.

Without breaking the bank.

But if you’re still searching for the ultimate in cost-effective car insurance, perhaps our third and final option will deliver the goods.

Third-Party Only Car Insurance

Did you know?

Third-party only car insurance is the minimum level of coverage required by law in the UK.

Simply put:

It covers the cost of compensating other people for injury or damage caused by you and your driving. This includes other drivers, passengers, or even pedestrians.

Of course, it goes without saying:

Third-party only car insurance is generally the cheapest type of insurance available.

But there’s a catch.

It does not cover any other costs, such as repair or replacement of your car, or your own injuries.


You might be asking yourself, is it worth it?

Well, in truth, it can be. Especially for older cars or drivers with low annual mileage.

But for many, the lack of coverage can be a significant financial risk.

In truth:

It depends entirely on your personal circumstances and – in my own experience – how well you wish to sleep at night.


Let’s recap.

By now, you should have a better understanding of the different car insurance options.

In a nutshell, these are:

Fully comprehensive, third-party, fire and theft, and third-party only. Each, as we have discovered, has its pros and cons.

In essence:

The choice as to which type of insurance you purchase depends on your personal preferences and attitude to risk.

What is vitally important is that you’re aware of the differences and make an informed decision, before you take to the road.

And remember:

Shopping around always lands you the best deal. Particularly if you use a quality car insurance comparison service like – ahem – this one.

Over to you.

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