Insurance Survey: insure your car

Insurance Survey: insure your car

Investing in a car

Buying a car or being a car owner comes with a lot of expenses; one has to buy fuel, accessories, do roadworthy certificate and most importantly insure the car to financially protect it and other road users.

A lot goes into investing in a car. One thing to take into consideration is the maintenance and security. While the level of expenditure doesn’t end at spending a significant amount for purchasing a car, insurance acts as an essential cover to protect it. If you have not insured your car under a beneficial coverage plan, you might have to pay high expenses following an accident, damage to third party properties, causing injuries or even death to third. The possibility of the car being stolen does exist and quite on the rise in recent times.

The frequency of motor vehicle accidents and insurance claims

Each and every day accidents happen. So, as we are advancing towards the electric cars and advanced safety system for making the drive safe, it is very important to insure one’s vehicle to ensure that in the event of an accident, fire. And burglary, the vehicle owner / driver is indemnified.

“Huge claims arising out of fatal accidents involving private and commercial vehicles had been a major headache for many insurance companies as they were not liquid enough to honour claims promptly resulting from the lower-than-regulated premiums they had charged in the past,” Commissioner of Insurance, Dr Justice Yaw Ofori cited as some of the reasons some members of the insuring public do not have confidence in insurance companies.

He, however, stated that with the Motor Insurance Database (MID), it is expected that insurance companies will be in a better position to pay genuine claims promptly to the utmost protection of policyholders and innocent third parties.

Not only is it required by Law to insure one’s vehicle but also the fact that car accidents are costly. The crashes of the cars on our roads are a great concern and very dangerous for us humans. Inasmuch as it is good to have a car, it is even more important to have it insured.

Other benefits of having a motor insurance policy

There is personal health insurance that acts as a cushion to aid one whenever he / she is involved in an accident. In the event of an injury, the insurer will pay the cost involved in the extent of damage to the car as well as damages paid to third party persons and / or properties.

Personally, I had never liked insurance till I witnessed an accident. Every second day, some mishap leaves any car damaged and the cost of repairing goes more than the cost of the car especially in situations where the car is not adequately insured or has no insurance at all. Motor insurance is a medium of saving oneself from the cumbersome expenses of car repairing, replacement, etc.

Insurance basically covers risks that may occur. If one is involved in a major accident and there is collision of vehicles, people who get injured or killed, and property that is damaged, require some amount of compensation as the total financial impact could be phenomenal. The liability benefits on one’s motor insurance policy help to protect one from this financial burden. One cannot afford to skimp on liability coverage, the reason it is required by Law to have a minimum of third party insurance cover in all jurisdictions across the world.

Generally, it is a good idea to compare policies from at least three different insurers and their claim payment records particularly with respect to the promptness with which such claims are paid.

There are three main types of motor insurance provided by insurance companies. These are:

  • Comprehensive Motor insurance
  • Third party insurance
  • Third party fire and theft insurance

Majority of car owners may prefer to buy the third-party car insurance over the other two because the premium payable is cheaper. However, it is more commonly recommended to opt for any of the other two insurance policies to attain maximum benefits from the cover.

In order to get value for money, it is important to consider the other two types whose premiums are computed on the value of the car and other risk factors such as the claims records of the driver taken into consideration.

Comprehensive Motor Insurance Cover

As there is a significant rise in the buying and selling of cars in the country, car owners are getting more serious regarding the insurance of their private and even commercial vehicles. Interestingly, commercial drivers have come to appreciate the benefits of comprehensive covers compared with third party covers which seek to protect mainly other road users and their vehicles only. Comprehensive cover is gaining popularity amongst many vehicle users and owners and is now one of the most preferred type of car insurance because of its vital benefits.

While, the other two types offer insurance cover for third party, fire and theft only, comprehensive car insurance provides benefits that will provide a complete protection for one’s car.  When one chooses a comprehensive policy, he / she has a full package covering the following:

  • Costs arising from the loss or damage done to the car or its parts
  • Third-party expenses
  • Emergency medical billing costs

Third Party Insurance Policy

This type of insurance offers the most basic benefits to protect one’s car in case of an accident. This plan must only be considered if one is looking for the minimum coverage for his / her car.

A third party policy is beneficial in the following cases:

  • If one only wants to ensure the car is legally acceptable to use the roads
  • It can be the best option if one knows that his / her car may not be exposed to any serious risks especially in cases where one does not use the car for commercial purposes and also for short trips.
  • It is beneficial if one’s car is not used much or has been in long-term storage facility.
  • This helps one to manage his / her cash tide.

Also, third party insurance meets the expenses that are incurred from an accident that occurred as a result of one’s fault, negligence or hasty – reckless driving. The policy will take charge of the liabilities arising from the damage made to the other person, their vehicle and/or property.

However, what this insurance doesn’t cover are the medical costs incurred from one’s own injuries or expenses met following the damage to his / her car. In short, third party insurance (as the name suggests) will only provide cover for the third or the other party involved in the accident and will not be liable for one’s own protection.

Third Party Fire and Theft Policy

While the above pointed on third party cover provides protection only for the third party involved, third party fire and theft offers additional benefits too. This type of policy gives the car owner or driver an above average protection. This plan is recommended in case the owner of the vehicle cannot afford a comprehensive cover but has the desire to have a more secured protection for his / her car.

It is cost effective and provides cover for few and specific risks that one’s car may be exposed to. The related terms and conditions, benefits are easy to understand.

Also, in addition to providing the third party benefits, it covers the expenses incurred as a result of loss or damage to one’s car from the most common incidents i.e. theft and accidental fire.

The writer is the Motoring Reporter and Production Lead at the Business & Financial Times (B&FT)


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