3rd party fire and theft

MynameisMichaelCane

Are insurance companies doing away with the 3rd party, fire and theft option? I recently tried to change my insurance from fully comp to 3rd party because it is an old car. It seemed that some companies only offer fully comp.

ontheroad1970

You will often find 3rd party fire and theft more expensive than fully comp.

born_again

Depends on their underwriter. They may not offer it.

DullGreyGuy

MynameisMichaelCane said:

Are insurance companies doing away with the 3rd party, fire and theft option? I recently tried to change my insurance from fully comp to 3rd party because it is an old car. It seemed that some companies only offer fully comp.

Yes, and TPFT is often more expensive than Comprehensive insurance. 

Its one of those negative selection things... most buyers have cars that aren't worth much and so the reduction in claims isnt massive as they still have to payout in full when you go into the back of a Rolls. Many buyers are high risk types doing whatever they think they can to reduce the price and so claims experience is worse despite no own vehicle cover. 

For insurers not wanting poor risk drivers in their portfolio they will stop offering TPFT which means there is less competition for those wanting it and so prices go higher.

Aretnap

Even without the negative selection factor you wouldn't expect a significant saving by choosing TPFT on an old low value car, as nearly all the risk at that point is for third party claims. If your car is worth a couple of grand tops then the insurance company, not being stupid, isn't going to offer you a big reduction because your saving them the risk of paying out for your car - it's trivial compared with the risk that you'll drive into an expensive car or worse still seriously injure someone and cost them tens of thousands in third party claims.

Add in the negative selection (people who don't really care about their cars, don't maintain them and are more likely to drive them badly are more likely to choose TPFT) and it's easy to see why TPFT is often more expensive than comprehensive, especially for cars at the cheaper end of the market. Which in turn means that fewer people buy it, which means the extra admin costs of running a separate type of policy have to be shared between fewer customers, making it more expensive still. Eventually the must come a point where there's no point offering it at all.

If you want something which is functionally equivalent to third party only you could set your excess as high as the insurer will allow and see if it brings your premium down, however once you get past a certain level of excess it might not make much difference or even send the price up again due to the same negative selection effects.

MynameisMichaelCane

Well that makes sense. This may be an impossible question to answer, but are newer cars cheaper to insure than old cars? 

DullGreyGuy

MynameisMichaelCane said:

Well that makes sense. This may be an impossible question to answer, but are newer cars cheaper to insure than old cars? 

Its very hard to compare accurately because a newer car is often worth more than an older car if for example you are looking at a 2021 Fiesta -v- 1989 Fiesta and if you try to correct for the price say by comparing a 2021 Fiesta -v- 1989 BMW 5 series (no idea if they'd be the same price but you get the idea) then you are looking at very different vehicles.

Ultimately insurers don't insure based on "sense" but based on statistics, they look at the rate of claims and the average cost of claims and price on that. As a consequence you get what appear to be anomalies... insuring a brand new Mercedes SL400 was cheaper than insuring a brand new Mini Cooper S despite one being a third of the price of the other and much lower performance. Again, if you want to apply logic rather than maths, it probably the type of person that buys a "hot hatch" -v- the type of person with £90k to buy a fat GT