There seem to be some misconceptions regarding different types of insurance cover in these comments. The minimum legal requirement, usually called Road Traffic Act cover, is actually cover for third parties' losses. The first party is you, the driver. The second party is your insurer. The third party is everyone else who might have a claim for any losses you cause them.
So any passenger who might get hurt or any person whose house or car you crash into will get reimbursed by your insurer regardless of who causes the accident. Even if they wanted to sue you, you'd be protected. It is precisely to protect the position of these innocent third parties that the law requires this minimum level of insurance. The real menace on our roads is, you may have noticed, not drivers with only RTA cover but those who are completely uninsured. And no-one on here I hope is suggesting THAT as a strategy.
The assertion that your own insurer will seek to recoup his costs from you is simply wrong. The whole point of insurance is that you are NOT liable in law for the insured risks. What you are buying with your premium (apart from the insurance company chairman's fancy Merc) is a warranty from the insurer that he will assume the risk. The ONLY way you would face having to pay these costs yourself is if your insurance company went bust and stopped trading. And even then I think I am right in saying there is an underwriting structure in place in the UK that provides a second level back-up for this event, not least because this is required as a consequence of the legal requirement for RTA insurance. In other words, if your insurer goes bust you will have residual statutory protection of at least RTA level much like the government now provides a safety net for your savings if your bank goes bust.
The next level up is commonly called "third party" insurance. Well, that too is a misnomer, because RTA cover is the "real" third party cover. What colloquially is called "Third Party" is generally RTA cover plus a couple of extras, usually cover for theft and fire, and since a car fire is almost always damage beyond repair, both of these are in effect total loss events. I appreciate that these days for many people "Third Party, Fire & Theft" to give it its full name is usually, paradoxically, more expensive than fully comprehensive cover, but that's just a question of supply and demand in the market place.
The fact remains, logically, that TPFT cover is the optimum cover, since it covers the minimum legal requirement and the total loss event that most people will not be able to afford to self-insure. That is, if someone steals your entire car, you are unlikely to be able to afford to replace it immediately out of your current cash in hand.
The top level, Comprehensive cover, doesn't give you any additional cover in respect of RTA or fire or theft that TPFT cover gives. What it *does* do is protect you against your own carelessness or negligence. It's no different in principle to accidental damage cover on your household insurance.
Now tell me this - when you spill the apocryphal paint while decorating your lounge and ruin the carpet, do you make an insurance claim, or do you just stump up and replace the carpet yourself? And if you do claim, what happens to your premium the following year?
If you have fully comp and you back into the gatepost, do you *really* make a claim? For repairs to your little 126? If you've got a brand new £50 grand Range Rover and you prang it through your own ineptitude, sure it makes sense to claim. But a 126?
A similar question - how many of you take your 126 to a Fiat main dealer to get it serviced? You'd take your brand new Range Rover to a main dealer, so why not your 30 year old Fiat?
The reality is that tens of millions of people get scrapes on their cars every year from all manner of causes, and never even notify their insurers, because the hassle is immense and all it really achieves is an increase in premium the next year.
So in reality, what extra cover is Comprehensive insurance providing that you are ever likely to use? The ONLY reason I and millions of others have Comprehensive is that it is the cheapest option. Large parts of the cover provided are totally irrelevant and will never be needed.
As for the risk of accidents, insurance companies and the media love to scare us with horror stories and skewed presentations of the statistics, but the simple everyday experience is that every day tens of millions of car journeys are made, whilst the number of crashes is just a few hundred.
It's true that a young and inexperienced driver is more likely to crash than an experienced one, but what exactly does that mean? If an experienced driver has a probability of crashing of 1%, and the young driver of 2%, yes, shock horror sensation, the young driver is TWICE the risk. But the reality is still that for all drivers there is a 98% probability of not crashing at all.
If you want to talk statistics, the real statistic is that none of you is likely to crash - EVER. "Likely" means greater than 50% probability. How many crashes do you know about? How many of your family or friends or neighbours have crashed? How often? Every year? Every week? Every trip?
If the insurance companies were telling the truth, our roads would be littered with crashed cars so much we wouldn't be able to move. The truth is that most people have no more than 4 or 5 crash incidents in their entire driving lives of 40 years and more. And that's typically about 500,000 miles.
If you want to judge probabilities in the proper perspective, have a look at this. These are the CAR INSURANCE INDUSTRY'S OWN DATA:
http://www.forbes.com/sites/moneybuilder/2011/07/27/how-many-times-will-you-crash-your-car/Get fully comp insurance by all means, but do it understanding that you are doing it because it's cheapest, not because it's providing you with something you will ever actually need. Unless of course you have a flashy brand new Range Rover and very narrow gateposts...
