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Fully Comp or Third Party

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Next time you’re looking for insurance on your car, whether it’s a renewal or otherwise, don’t just assume that third party fire and theft insurance (TPFT) will cost you less than comprehensive - It can occasionally be the other way round.

The reason for this? Statistics. See, insurance companies tend to base their prices and rates on statistics, and these numbers can occasionally become a little skewed. Imagine you’re a young, headstrong driver who’s just bought his or her first car, and it’s a banger that didn’t cost much. As a result of this, you drive the car hard, and because it isn’t worth much, you insure your car TPFT.

Now, you’re not the only person like yourself that your insurer covers, and after a while they realise that you and people like you are causing more accidents than the average driver. As a result of this, your insurer slowly raises their rates for drivers like you, their cover getting more and more expensive.

At the same time, imagine you have instead taken out a loan in order to buy a more expensive car, and because it’s your pride and joy, you have taken fully comprehensive insurance out on it. You also drive more carefully, make fewer claims, and because the claims made against you are generally less expensive for the insurer, their cover slowly begins to creep downwards.

Now, I’m sure you can see where this is going: Eventually, these two prices cross over, and fully comprehensive insurance suddenly becomes cheaper than TPFT. This tends to happen in annual cycles, because once the prices cross and it’s time to renew your insurance, the group who were originally driving round in TPFT insured bangers are now still revving the backsides off them, but are now covered comprehensively because it’s cheaper - And you can probably guess what happens next: insurers suddenly decide that because comprehensive drivers are costing them more money now, it’s time to switch around again.

This over-reliance on statistics is something that many insurers suffer from, not just the smaller ones - if they could prove that blue eyed people have more accidents than those with brown eyes, the girl in Van Morrison’s song would be cruising around and paying a pittance for her cover. It’s worth checking when you come to renew what’s cheapest at the time - especially if you sit somewhere between the two extremes mentioned and simply want the cheapest insurance you can get.

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