What Does Third-Party Insurance Cover?

Learn more about the minimum level of car insurance coverage.

Third-party insurance is the minimum level of car insurance required to drive legally in the UK. But what does third-party insurance cover? When is it a good option? And are there any downsides to it? 

Here, we answer all of those questions and more. 

What is third-party insurance, and what does it cover?

First thing first: what does third-party insurance mean?

Well, it gets its name because it refers to the “third party” in an insurance claim. 

  • You, the driver who purchased the cover, are considered the “first party”
  • Your insurance provider (who assumes the risk) is the “second party”
  • And the driver, passenger, or vehicle involved in an incident with your vehicle is the “third party”

What’s covered by third-party insurance? 

Third-party insurance (sometimes called third-party only insurance, or TPO) means that, in the event of an accident, you’ll be covered for any damage caused to another person’s vehicle if the accident was your fault. 

You’ll also be covered for any personal injury claims from the driver or passengers involved (either in your car or the other driver’s car). 

So long as your insurance is valid and up-to-date, your insurer will pay out compensation to the other party or parties involved in the accident. 

However, third-party insurance does not cover damage to your vehicle. And if you’re also injured in the accident, you may have to pay for your own medical costs. 

What happens if I have third-party cover and I get into an accident?

According to Citizens Advice, you should not admit fault at the scene if you get into an accident.

Instead, you should:

  • Note the registration numbers of the other vehicles involved in the accident.
  • Exchange names and other details with the other drivers. If anyone refuses to give you their information, your insurer may be able to trace them through their registration number.
  • Get details from any independent witnesses.
  • Tell your insurer about the accident ASAP (even if you don’t want to make a claim).
  • Take photographs of the scene that you can use later if you need to make a claim.

And if someone is injured in the accident, show your insurance certificate or cover note to the police at the scene. If you don’t have those documents available at the time, you’ll have seven days to take them to a police station. 

If you have third-party cover, you should make a claim against the other driver.

Your insurer will then review all available evidence and testimonies before deciding who was responsible for the accident. 

  • If they say you were at fault, your insurer will make a payout to the other driver to cover the cost of vehicle repairs and/or personal injury claims. However, you’ll be responsible for the cost of repairs to your vehicle. 
  • If the other driver was at fault, you’ll receive compensation from their insurer for repairs or medical expenses, such as physiotherapy. 

If you’ve been in an accident and received a claim form from the other driver, you should forward this to your insurer straightaway. 

Need to make a claim with A-Plan? We make it easy. Get started here.

What happens to my no-claims discount? 

When you have third-party car insurance, you can often build up a no-claims discount by not having any claims made against you.

However, if another driver does make a claim against you and your insurer agrees that you were at fault, you could lose some or all of your no-claims discount. It all depends on the terms and conditions of your policy. 

If you’re unsure how it works, contact your insurer for more details. 

Read more: How Does a No-Claims Bonus Work?

What other car insurance options are available?

Generally speaking, there are three levels of car insurance coverage available to choose from:

1. Third-Party-Only Car Insurance

As we mentioned at the start, third-party car insurance is the minimum level of cover required to drive in the UK. It only covers third parties (other drivers or passengers, including your own) in the event of an accident. 

2. Car Insurance: Third Party, Fire and Theft

The next level up from third-party-only, third-party, fire and theft includes cover against your own vehicle should it be stolen or suffer damage in the event of attempted theft or fire. 

3. Comprehensive Car Insurance

Finally, the highest level of car insurance is comprehensive cover. This protects you against damage to your own car in the event of an accident, in addition to third-party claims, fire, and theft. You’ll also be covered for any medical expenses incurred following an accident. 

Read more: What is comprehensive insurance?

When is a third-party-only policy a good option?

Third-party-only cover can be a good idea if your vehicle isn’t worth a lot. That’s because the cost to fix the car following an accident could be similar to simply buying a new car. 

And new or younger drivers may be drawn to third-party cover if it works out cheaper than comprehensive car insurance — although, as we discover below, that’s not always the case. 

What are the disadvantages of third-party car insurance?

The main disadvantage of third-party car insurance is that you’ll be on the hook for your own repair costs if you’re at fault in an accident. And if your car is fairly new, repairing it from your own pocket could be more expensive — especially if specialist parts and labour are required. 

Does third-party insurance mean you can drive any car?

No. In order to drive someone else’s car, you’ll need “driving other cars (DOC) insurance.” And this is usually only available as an add-on for comprehensive car insurance policies. 

If you have this cover in place, you can drive another car without being a named driver or needing to buy temporary cover. You just need to ensure that the car is covered by an existing insurance policy and that you have permission to drive it. 

How much does third-party car insurance cost?

As with any type of car insurance, the cost of third-party cover will depend on your age, previous driving history, how many miles you drive, the security features of your car, where you live, where you park at night, and much more. 

Is third-party car insurance always cheaper than comprehensive car insurance?

Not always! Because third-party policies often attract higher-risk drivers, insurers may be more likely to have to make payouts following an accident. 

With this in mind, both third-party-only and third-party, theft and fire policies can sometimes be more expensive than comprehensive cover. 

It’s always a good idea to compare quotes from different providers and across varying levels of coverage to find one that works for you. 

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To recap:

Third-party car insurance only covers payouts to third parties involved in accidents. This includes the cost to repair the other driver’s vehicle or personal injury claims made by the other driver or any passengers involved in an accident (including your own). 

Does third party insurance cover all damage and injury?

Third-party insurance doesn’t cover all damage and injury. That is, if your car is damaged or you get injured in an accident that was your fault, your insurer won’t cover your repair bill or medical expenses.

Does third party insurance cover a non-fault accident?

If you’re not at fault for an accident, you won’t be able to make a claim on your insurance, but you should receive compensation from the other driver’s insurance provider. 

Also read:
Car insurance: What is a non-fault claim? 
Can I Drive Another Car On My Insurance? DOC Cover Explained 
Do you need specialist insurance for a campervan?