Third Party Insurance doesn’t cover accident damage to your vehicle, the third party vehicle or property. Your Third Party Insurance only protects you from claims made against you or the driver of your vehicle if someone gets injured.

It is usually a good option to purchase additional Third Party Insurance with a more comprehensive insurance policy which covers property damage, fire and theft, and collision damage as a minimum. A full comprehensive insurance policy covers you for many other items such as legal fees and towing of damaged vehicles.

Automotive travel insurance can best be described as an emergency breakdown service which provides the covered vehicle with mechanical assistance if it breaks down, rather than replacing financial loss as a result of an accident. Automotive travel insurance is better known as roadside assistance and gives you peace of mind that should your vehicle suffer from a mechanical failure a mobile repairer will come to your rescue. In the event of total mechanical failure if roadside repairs cannot get you moving again, your vehicle will be towed to a mechanical workshop for the repairs.

It has become common practice for some new vehicle manufactures to provide extended warrantees by way of a maintenance plan, with the premium being incorporated into the vehicle purchase price or as an optional extra.

Items covered:

• Jump starting if battery goes flat
• Wheel change if tire is punctured
• Towing if on-the-spot repairs fail to get the vehicle moving
• Small amount of fuel if you run out of gas

Some comprehensive coverage even provides accommodation if repairs take more than a day while on a long-distance journey.

Items not covered:

• Petrol and oil top-ups
• Accident damage
• Tyres
• Non-mechanical repairs, such as: body, paint, trim, upholstery, cosmetics, sunroof & electric roof
• Windscreen, lenses & windows
• Repairs to CD and radio/tape players

Insurance companies must consider the risk of insuring a vehicle and set the premium (cost of coverage) based on years of statistical data for vehicles and drivers being involved in accidents, vehicles being stolen and the possibility of insurance fraud.

It is quite obvious to insurance companies that younger drivers present more of a risk than a mature and experienced driver. It is also obvious that a vehicle with an anti-theft system installed and parked in a locked garage is less likely to be stolen than a vehicle parked on a dark road without an anti-theft system. Insurance fraud is also a problem for insurance companies, for instance when someone deliberately destroys their own vehicle for the insurance payout. All of these may cause the insurance companies to increase the premiums.

Insurance companies usually offer incentives of lower premiums or modified policies, which encourage vehicle owners and drivers to be more responsible with their vehicle.

In most countries, third party insurance is compulsory before a vehicle can be registered and can sometimes be combined with government vehicle registration fees. It is also a common practice for insurance companies to set an excess fee that is paid before the insurance company’s coverage, which means that small claims for minor damage are not claimed.

When insuring a motor vehicle, the insuring company uses a risk management system to determine the amount of coverage and premiums vary considerably depending on a number of factors, such as:

• Value of the vehicle
• Type of vehicle
• Age of the driver
• Year model
• Anti-theft systems installed
• Parking arrangement

Mandatory insurance or liability insurance is required by the government for all registered vehicles and covers any third party damage or injury incurred in an accident and covers only the “not at fault” persons or property. Premiums for mandatory insurance are usually set or regulated by the government.

Vehicle coverage

• Personal vehicle insurance covers the insured vehicle whether it is at fault or not in an accident and can also cover the vehicle for other factors causing loss or damage, such as fire or theft. Personal vehicle insurance premiums are usually determined by the insurance company depending on the level of insurance coverage.
• The main insurance levels:
• Vehicle coverage – repair damage or replacement of vehicle value in the event of a total write-off.
• Driver coverage – medical expenses sustained by the driver and/or passengers in an accident.
• Theft coverage – replacement of vehicle value if vehicle is stolen.
• Fire coverage – repair damage or replacement of vehicle value if vehicle is fire damaged.
• Third party coverage – bodily injuries and property damage to others if involved in an accident with the insured vehicle.