Just as the name suggests, comprehensive insurance is a level of insurance cover that covers pretty much anything and everything. Giving you maximum peace of mind as a car owner. It covers you for all losses in an accident, for theft, as well fire and hail damage.
Unfortunately, comprehensive car insurance is also the most expensive insurance option. Many car owners on a tight budget opt instead to go for lesser forms of cover. The most popular of these is Third Party Fire & Theft cover.
These types of cover can be a great option for some drivers, particularly if:
- Your car is an older model of significantly decreased value, and is completely paid off, or
- The car is not used very frequently.
You’ll need to have a complete picture of exactly what is covered and what is not. This is particularly important if you do decide against opting for comprehensive car insurance.
Third party insurance covers you against the costs of fixing someone else’s vehicle if a collision was your fault. In the unlucky circumstance where you are involved in an accident, the other party involved could be driving a luxury car worth millions. Third party insurance does not cover the damage done to your vehicle. Although, if the accident wasn’t your fault, you can claim against the other driver’s insurance.
So who is the Third Party?
In an insurance claim, the third party is the person who is suffering a loss because of your actions. They are seeking to settle their claim against you, as the insured party. The second party is your insurance company. In most cases the third party is the driver of the other vehicle. It can also be a business, if you crash into a fleet vehicle, or cause damage to an office or shop front.
An accident isn’t always one party’s fault or the other’s. In these cases some insurance companies will apply Apportionment of Damages principles and calculate the amount payable for each party. This occurs after taking into account the role each played in the accident.
If you have the budget for it, comprehensive insurance is definitely the best way to go. This will allow you to rest assured that you’re taken care of, no matter what South Africa’s roads throw at you. However, third party insurance should be a non-negotiable part of being a car owner. The importance there of can’t be stressed enough. Particularly when you could face financial ruin thanks to a moment’s lost concentration while driving.