With so many different types of car insurance coverage out there to choose from, deciding which one is right for you can be difficult. There are hundreds of car insurance companies in the UK , and the type of policies and additional features they offer will vary greatly between each insurer. Finding the right kind of cover for you and your circumstances can mean peace of mind in the event of an accident. Ask the right questions of the insurance companies and do as much research as you can.

The three main types of car insurance cover available are – third party, third party fire and theft, and fully comprehensive.

Third party insurance is the most basic form of car insurance available, and the minimum required by law. It only covers you against damage to another party's property or injuries to others. Neither you nor your car will be insured, and if your car is stolen, you will not be able to make a claim. If your car is of little value, then this type of coverage would probably be sufficient.

Then there is third party, fire and theft cover. It gives you the same coverage as third party plus the added protection of cover in the event of your car being stolen or catching fire. If you can afford it, this is perhaps a better option.

Most people take out fully comprehensive car insurance. It is the best policy you can buy and includes the cover of third party, fire and theft along with any damage to your car, whether you were responsible for the accident or not. Even though it will cost more than the other types of coverage, if your car has a higher value it is well worth it.

There are other kinds of insurance available – intended primarily for special circumstances. These include short-term car insurance, useful for times when it's convenient to be insured for less than a month or so. Pay as you drive insurance – a relatively new insurance policy that uses global positioning systems (GPS) to track when and where you drive. Premiums are usually charged by the mile at different rates depending on where and what time of day you drive. And finally, grey import car insurance, intended for cars that have not been built and designed for the UK market. Any car in this category will usually require coverage from a specialist car insurance company.

While the three main types of car insurance are generally defined in the same way, the terms and conditions will vary from insurer to insurer. Always check the small print in a policy for additional features covered. For example, just because you have comprehensive cover, it does not necessarily mean you will be covered for such things as windscreen damage, or that you are entitled to a courtesy car. Clarify with your insurer which additional features are included in the policy and which aren't.

Firstly, the courtesy car – normally only included with comprehensive cover. This benefit is usually only available while your car is being repaired, not if your car is written-off or stolen. However, you should be aware that most insurers do not include this facility in their policies free of charge. Many insurers will now charge a one off fee of £15 - £30 for a courtesy car should you need one.

Most comprehensive policies cover the cost of car windows if they get broken, but not necessarily the cost of sunroofs. Also check whether or not claims for windows will affect your no claims discount.

In the event of audio equipment being stolen from your car, you will be covered under most policies. However, the amount you can claim is likely to be limited if the equipment is not standard to the car.

It is probably not worth adding cover for personal belongings stolen from your car, as when you factor in your claims excess combined with the often extremely low maximum claim limit, it's hardly worth it in the end.

Driving other cars was once a standard feature in policies. This is no longer the case however, so you should check your policy to see if you are indeed covered. If you are covered, it is normally limited to Third Party only.

Most insurers will include driving you car in Europe on your policy, although you should notify them if you are planning on this. The length of time you can drive your car abroad before having to pay extra will depend on your insurer. Most allow a period of 30-60 days. What's more, your coverage will normally only be the Third Party equivalent of the country you're driving in.

Some policies will include cover for trailers towed behind your car. Check what sorts of trailers are covered – caravans, horseboxes or food trailers, for example.

Many car insurers will offer a breakdown service for your car. However, very few will provide this service free of charge, and could add anything from £30 to over £100 to your policy. Buying breakdown cover from your insurer is not necessarily the cheapest option, so shop around for the best deal.