Third Party Fire and Theft is the second type of insurance cover. The other two types of cover are Full Comprehensive Cover and Third Party Cover.
Third Party Fire and Theft cover is a bit cheaper that full comprehensive cover obviously because it covers you for less. On third Party Fire and Theft cover you are covered for:
- Theft, should your car be stolen
- Fire damage should you car catch fire due to electrical fault Etc.
- Or the third parties damages should you be involved in an accident and is proved to have been your fault.
You’ll see that third party fire and theft cover does not cover damages to your own vehicle whatsoever. It is for this reason that banks and other finance houses will not accept third party fire and theft cover on your vehicle while it is still being financed. They would want to know that should anything happen to the vehicle it is covered for the damages. Remember that the bank or finance house still owns the vehicle until you have paid it off. They would need to have the car in good condition should you not be able to pay for it so that they may be able to sell it to reclaim the costs.
Why would you have third party fire and theft cover then?
People take out third party fire and theft cover on older vehicle or vehicles that are no longer on vehicle finance. Driving a car on the road leaves you with responsibility for other vehicles. You may not be too worried about damages to your own vehicle but don’t want to be held responsible for another persons vehicle. Also you would take third party fire and theft cover so that your car is still covered for theft and fire. Not to mention that it is also more cost effective than full comprehensive cover.