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Understanding the Basic Types of Car Insurance

In other words: Car insurance for dummies…

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THIRD PARTY ONLY

Third party only is the most limited form of cover and is also the cheapest of the options. It covers you for damage to another party’s vehicle in the event of an accident and will cover the costs associated with the accidental death or injury of third parties involved in the same accident. Your own car is not covered in any way.
Policies may also include a wide range of additional options and benefits which you do not always need and could be omitted to lower your monthly premium. These are further discussed in the following article: What Car Insurance Coverage Can I Do Without?
Maintaining your insurance policy is an on-going process. Cars lose value over time and the insured value of your vehicle needs to be monitored and updated from year to year.
If your premiums are based on your original purchase price, but the car’s current value is less, only the discounted value will be paid out by the insurer. Make sure your car is not insured for more than its current market or retail value. Contact your insurer and consult with them on whether your premium might be adjusted.
Finally, your insurance policy is in place and you can rest assured. Continue to drive safely and take caution where you park your car and you might not even need it, but it is always better to be safe than sorry!
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