different types of car insurance

Understanding Different Types of Car Insurance Policies

Car insurance is a necessity. In most countries, auto insurance cover is mandatory. Among other things, it covers your costs in case of a car accident. To help you make the right choice, here is a breakdown of different types of car insurance.

Third-Party Only

Considered to be the most basic level based cover, third-party only is the bare minimum when it comes to law. In fact, all types of policies come with a third-party only cover. In case of a road accident and you injure another person, this coverage will cover all medical expenses of the other party. This auto car insurance policy covers the following key things.

  • Damage caused to other vehicles. This includes scratches, minor collisions, and damaged side mirrors.
  • Body injuries on other people or animals. Hitting other rod users can be costly in terms of covering medical expenses. 
  • Property damage

Third-Party, Fire, Theft

Another common type of auto insurance is the third party, fire, and theft. This policy comes with all the benefits contained in third-party-only in addition to 1-2 extras. This policy protects you in case of car theft or car damages resulting from the fire. Even more, this type of policy protects your car in the event of attempted theft, break-in, etc.

Comprehensive Cover

The third type of car insurance is a comprehensive auto cover. With this policy, you have a cover that gives you access to policies that fall on third party, fire, and theft in addition to a few extras. This means that this level gives you all the benefits that come with third-party-only.  This option will cover you from car damages (even if the accident was your mistake). It’s also important to note that comprehensive policies cover car owners from windscreen damages. In addition, in some cases, your insurance company may throw in courtesy cars. However, it’s important to consult with your agent because not all insurance companies have a provision for this.

According to most people, comprehensive covers are expensive. In their mind, the more the benefits, the more the money you pay. However, things don’t always work like this. Plus, drivers who are deemed high risk tends to go for comprehensive covers. Consequently, these policies tend to cost more.  Also, comprehensive car insurance is not always a full comp cover. Sometimes it doesn’t offer everything. Thus, it’s important to consult with your broker to establish the limits of your cover.

You can also check out our guide on how to cancel popular car insurance policies if you are looking to switch to a better deal. To find out how much you are currently paying for your car insurance: just download the Emma app, connect your bank accounts and you will find your auto insurer in your Subscriptions list.

The Bottom-Line

Don’t purchase any car insurance cover. Purchase a policy that suits your explicit needs. Remember, each type of car insurance comes with its own features, benefits, and pitfalls. Make sure you understand the different types of car insurance covers before signing up. Choose the right cover for your needs and spin your four-wheeler with confidence.

Note: This article was written in collaboration with Helen Bell.

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