In the event that you are a newcomer to the auto insurance market, then you need to know the difference between a comprehensive insurance policy and a third-party insurance policy – this information is not only for the sake of new car owners, but is directed to all motorists who, in a large percentage, do not have enough Knowledge of auto insurance policies in general.
Knowing the difference between the two policies is the beginning to help you get the most suitable insurance policy for you and your car together. Money Market.com summarizes the difference between the comprehensive insurance policy and the third party insurance policy.
What is comprehensive insurance?
With the name of the policy itself, you can take a brief summary of what it contains. Comprehensive insurance provides comprehensive coverage for car owners. This type of insurance covers the liability of the third party as well, meaning it protects the insured from legal liability for any accidents that may cause damage to the third party. Not only that, the comprehensive insurance policy covers the insured against damage or loss due to theft, and other damages. In addition, it also covers the insured driver and the passengers in the car by providing compensation in the event of accidental bodily injury, along with the payment of medical expenses related to this injury.
This type of document covers a very large range of damages, apart from car accidents, there is another group of risks that it covers such as fires, theft, coverage of natural disasters, riots and strikes. The driver is also covered against personal injury that may occur while driving, and any emergency medical expenses that arise as a result of that are also covered. Besides the basic set of covers, car owners can choose between optional additional covers such as, off-road coverage, agency repair, GCC cover, personal accident cover, etc. Please note that while some documents may offer these features as part of the primary coverage, other service providers may need to register you for any of these additional coverage separately.
What are the exceptions within the document?
Comprehensive insurance policies come with many benefits, but these benefits are also subject to some exclusions and limitations. The exceptions include losses due to corrosion, electrical or mechanical failure, breakdowns etc. Tire damage is also excluded from coverage. Unless otherwise specified within the text of the policy, damage to personal effects or loss within the vehicle is usually excluded by most insurance companies as well.
What is (mandatory) third-party liability insurance?
This type of document is the primary form of auto insurance for residents of a kingdom. A third-party liability insurance policy (or (mandatory)) protects you from legal liability towards the third party. Basically, it protects you financially in the event that your vehicle causes death / bodily injury to a third person, as well as damage to the cars or property of others.
It must be noted here that this coverage is compulsory for all car owners and drivers according to the law.
Given that the coverage provided by this type of policy is somewhat limited, for this reason it is relatively cheaper compared to comprehensive insurance policies. It is also good to search and find out if the company through which you will obtain your car insurance policy will bear some costs such as legal expenses in the event of clashes and the arrival of the case to the courts.
What are the exceptions within the document?
If you choose a third-party insurance policy, it is important to know that you will not receive any compensation for damages to your vehicle. No person who drives or occupies your vehicle will be covered financially against accidental death or bodily injury under this basic car insurance policy.
Finally, which document is best suited for me? Comprehensive insurance or third-party insurance?
There are a set of criteria that help you choose which one is best for your car, but in the first place comes the budget, based on which, in addition to those criteria, you can easily choose the most appropriate document. For example, if you buy a completely new car, it is certain that the comprehensive policy will be the best and most suitable for your car to avoid paying any additional expenses in the event of any accidents or damage. In the event that you buy a car that is relatively older and does not need a lot of money to repair it, we recommend that you obtain a third-party insurance policy.