The importance of Motor Insurance
Every one who drives a vehicle must be covered under a motor insurance policy. It is a legal requirement. Failure to have adequate insurance or driving without insurance is a criminal offence. However more than just a legal requirement it is also provides peace of mind for the motorist in the event of an accident.
There are three types of motor insurance policies: comprehensive, third party and third party fire and theft. Under an insurance contract the first party is the insurance company, the second party is the insured and the third party is the other motorist involved.
The comprehensive insurance policy as the name implies covers all risks. It pays out for damages caused to another motorist’s vehicle and for any injuries sustained by that motorist if the insured was responsible for the accident. If the accident was caused by the other motorist the policy will cover the damage to the insured’s vehicle (the insurance company will recover the cost of the repairs from the other motorist’s insurer). Even if the accident was caused by the insured (with or without the involvement of a third party) the policy will cover the cost of the repairs to the insured’s vehicle. The policy will also pay out if the insured’s vehicle is stolen or set on fire.
The third party insurance policy covers the motorist for damage to another motorist’s vehicle and for any injuries sustained by that motorist if the insured was at fault for the accident. However, the policy will not cover the insured for any damage to his car caused as a result of the accident. If the accident was caused by the other motorist the insured will need to recover his losses (for damage to his vehicle and for any injuries sustained) from the other motorist.
The third party fire and theft insurance policy has the same features as the third party insurance policy except that for an additional premium cover can be obtained so that the insurance company will pay out if the insured’s vehicle is stolen or set on fire.
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