Pay as You Go car insurance?


 Pay as You Go car insurance?

Pay as you go car insurance – also known as Third Party Fire and Theft – is a type of car insurance that covers the driver when driving their own car or a borrowed one, but only when it's being driven. If the driver causes any inconvenience to other motorists such as by blocking a junction or dropping litter, they have no cover. This type of insurance has previously been popular among young people and those who don’t drive much, but these days it’s available to anyone with an up-to-date credit score.

The main benefit of this type of policy is that it is far cheaper than most other types: for example comprehensive cover can cost four times more than this kind on average. Many people have no objection to third-party fire and theft cover as they are insured in the knowledge that they will not be liable for any damage, but there are a few reasons why you may want to consider opting for a different kind of policy.

You may think the policy offers you less protection than other types when driving your own car. For example, some companies offer car-only policies that can cost up to 50% less than a comprehensive policy. The main difference between pay as you go and full cover car insurance is that you can drive the car in question without taking out pay as you go insurance, but if you damage another driver's property or cause an accident when driving their car, it is your own responsibility.

If you have only driven your own car for a short while, you may be able to find cheaper cover by opting for a year-round policy. Unlike pay as you go car insurance, year round insurance policies do not run out before the beginning of the next year. Although it is possible to take out annual insurance at any time of the year, there is usually a price advantage in taking out a policy in January because the insurance company has already calculated its risk for the next year and can therefore offer cheaper rates.

You will also need to make sure that what little cover this type of policy offers really meets your needs. Most companies include third-party cover if you are transporting an unregistered passenger even if they own the vehicle. In addition, if you borrow someone's car and it's stolen, you will not be covered under pay as you go car insurance.

Some companies offer a very wide range of cars and vehicles and policy documents are normally lengthy. This means that it may be difficult to work out how much cover you need. For example, if you drive your own car at least once a week, it is quite common to take out comprehensive cover for up to £3000 per year with one company. This is exceptional given the price of normal comprehensive cover.

If you have an accident in someone else's car, the insurer will not usually pay for the repairs or replacements unless they are very expensive.

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