Is third party insurance cheaper than fully comprehensive?

Comprehensive_or_third_party_insurance

Third party v fully comprehensive insurance

Is third party insurance always cheaper than fully comprehensive?
Third party only should be cheaper, but according to moneysupermarket.com this is not always the case.
Let’s understand the difference between policies. The law demands you have third party insurance which covers the cost to others (the third party) of the damage and injury you cause through your own fault. Your own vehicle is not covered by your own policy.
Next you can add to the third party policy, fire and theft being the usual sensible additions.
A fully comprehensive policy has everything above, and then includes cover for your own vehicle damage, regardless of who was at fault. Your vehicle is covered up to its market value at the time of the damage. You can add extras like motorcycle helmet and protective gear.
So it looks like the insurance company is at risk of paying out more, so the premium should be higher.
Our friends at moneysupermarket.com have researched 1.4 million annual car insurance policies and the result challenges what we might have expected.
On 30 June 2010 Felicity King-Evans wrote for the comparison website.
Moneysupermarket.com’s analysis has found that in actual fact, fully comprehensive cover is often the cheapest, despite offering the highest level of protection. So how can this be possible?
To find out run a quote for yourself covering all the options. The average driver will find that their car insurance premiums rocket if they search for third-party-only cover.
But why? It’s always been assumed that the less cover you buy, the cheaper the policy.
Steve Sweeney, moneysupermarket.com’s car insurance expert, explained: “In recent years, drivers with a more ‘risky’ profile, such as younger motorists or those with driving convictions have opted for this cover to keep the cost of motoring down.
“Providers have reacted to this perceived increase in risk by driving up the cost of third-party only cover.”
After all, insurers are in the business of assessing risk. For example, there’s a higher likelihood of accidents among teenage drivers, so they are charged more. So, if car insurance providers realise that motorists buying third-party only cover are more likely to be involved in accidents, they will rack up the price accordingly – and that’s what’s happened.
Third-party only cover costs an average of £1,927 a year, which is a whopping 109% more expensive than average fully comp cover at £922 a year. The average premium for third party, fire and theft stands at £1,348 – nearly 50% more than fully comprehensive.
It’s not just that riskier drivers go for these policies, driving up the average cost. By choosing third party cover, experienced drivers fall into a riskier category in insurers’ eyes – the result of which is a higher premium for the individual.