What is the Difference Between Comprehensive and Third Party Only Cover?
A Comprehensive Motor Trade insurance policy offers a different level of cover than Third Party Only.
When it comes to insurance terminology, Comprehensive cover and Third Party Only cover are two of the available levels of cover generally associated with motor related insurance policies, and in relation to Motor Trade insurance, the similarities and differences between the two levels of cover are pretty similar to that of a Private Car insurance policy.
To best explain the difference between Third Party Only and Comprehensive cover, it’s best to first define what each cover level actually is:
Motor Trade Third Party Only Cover Explained
As it is with a Private Car insurance policy, Third Party Only cover is the basic legal minimum insurance cover you are required to take out. If you have a Motor Trade insurance policy with a Third Party Only cover level, in the event of a motoring accident that is deemed to be your fault (or the fault of any of the drivers legally allowed to drive under the terms of your policy), your insurer will pay out for damages to the third party vehicle. However, with Third Party Only, you are responsible for paying for any damages to the vehicle you are driving, whether it belongs to you or to one of your customers and is under your custody or control.
Comprehensive Motor Trade Insurance Explained
If you take out a Motor Trade insurance policy, whether that is a Car Garage insurance policy or another type of Trade insurance, with a Comprehensive level of cover, then in addition to covering any damages to a third party vehicle it will also cover damage to your vehicle(s) as a result of an accident that you were deemed guilty of causing. Comprehensive Motor Trade insurance will also cover your vehicles if they are damaged by fire or if they are stolen.
With a Motor Trade insurance policy, depending upon which area of the motor trade you work in, you may have to have cover for driving customer vehicles, whether that be for diagnosis and testing purposes in the case of a mechanic, or for cleaning or moving in the case of valeters or car jockeys, and with a Comprehensive policy, these vehicles would also be covered, as would any that are in your custody or control.
Similarly, as a motor trade business, you may need to have your employees covered to drive your business related vehicles, or your spouse or partner covered to drive your personal vehicles, and a Comprehensive policy would cover damage to your vehicles if they were driving too. However, make sure you are clear with what they can and can’t drive under the terms of your policy, and what they are or aren’t covered for, as certain drivers may not be allowed to use your vehicles for certain reasons, for example your employees may be covered to drive your vehicles for business purposes, but not for Social, Domestic & Pleasure use, so if they have an accident in one of your vehicles that they’ve borrowed for the weekend, this may not be covered under your policy. For specific details of what your policy does or doesn’t include, please check with your broker.
Should I Get Third Party Cover?
Third Party Only cover is often considered to be cheaper than a Comprehensive policy, and so many people go for this option to try and save some money. While in actual fact there are certain instances where a comprehensive insurance cheaper than a TPO cover.
Also, regardless of whether a policy is cheaper at the time you took it out, you may find that Third Party Only cover winds up being more expensive in the long run, should you have an accident, as it does not cover your vehicle, so you’ll have to pay for any repairs out of your own pocket.
When choosing a level of cover, you should consider what is manageable for you financially. If your vehicle is a much older, lower value model that would be cheap to repair or replace, then Third Party Only cover could be more suitable for you. However, if your vehicle is a newer, more expensive model, then it may cost a lot for repairs, and so having to foot the bill yourself in the event of an accident may not be doable, in which case, you would be better opting for a Comprehensive policy.
How Can We Help?
It is worth noting that both Third Party Only and Comprehensive Motor Trade insurance policies can be customised with add-ons to suit your Motor Trade business, including motor trade specific add-ons, such as Stock of Vehicles and Carriage of Vehicles cover. Again, the add-ons available from each broker can vary from insurer to insurer, so check before taking out a policy that it covers you for everything you need.
If you’ve found this page because you’re trying to decide which type of policy is best for your motor trade business then you need to take a look at how your business operates, for example a motor trader that spends a significant amount of time on the road might find that a Comprehensive Motor Trade insurance policy will suit them best, but a mechanic that operates on an industrial estate with minimal or a low amount of traffic might find that Third Party Only is suitable cover. Each motor trade business is different, and as a specialist broker we are able to tailor our Motor Trade insurance policies to match your business and your insurance requirements.
To discuss this further with one of our experts, call us on 0800 221 8077.