Drive It

Understanding the Basic Types of Car Insurance

In other words: Car insurance for dummies…

Page 3 / 4


There are basically two main types of car insurance policies available in the market and others which are basically variations of the two main types. The first one, commonly known as ‘third party’ insurance, covers the policy holder against third party liabilities and claims but does not cover your own damages. The second insurance type is known as the ‘comprehensive’ car insurance cover which covers 3rd-party damages and injuries, theft of your vehicle or fire, as well as any damage to your own vehicle. Vehicle owner needs to be aware of the variety of vehicle cover options as described below:


This type of insurance covers injury to other people or damage to their vehicle / property in an accident as well as your own vehicle for accidental or other damages, theft and hijack, and some ‘acts of god’ that might be separately specified. Acts of god could include: natural fire, explosion, earthquake, flood, typhoon, hurricane, storm, tempest, inundation, cyclone and hailstorm, inland waterway, and others. Usually riots and strikes, malicious acts or terrorist acts is not covered, but check your policy specifications. Because of the extent of the cover, Comprehensive is the most expensive type of car insurance.


If you don’t spend much time on the road but want to enjoy all the benefits of comprehensive insurance, some insurers offers Pay-As-You-Drive insurance that are worked out by charging you proportionately for the amount of time you spend on the road.


Covers you for damage to the other party’s vehicle in the event of an accident, and for your vehicle in the event of loss by theft, or fire only. Damages to your own car in the event of an accident will not be covered.
Continued on page 4…
Previous Page
Next Page