motor.jpgmotor.jpgApart from being a legal requirement, motor insurance also offers a peace of mind to the motorist in the event of an accident. There are three types of policies which he/she can choose from: comprehensive, third party and third party fire and theft. Under every insurance contract, the first party is always the insurance company; the second party is the insured policy holder; the third party is the other motorist involved in the mishap.

The comprehensive insurance company, as the name implies, covers all potential risks. Not only does it pay out for damages to the vehicle of the other motorist but also for any injuries sustained by that very motorist if the policy holder (second party) is accountable for the accident. But if the accident is caused by the other motorist (third party) then this type of policy will cover the damage to the insured’s vehicle. (The insurance company will be obliged to recover the cost of the repairs from the third party’s insurer.) The policy also pays out if the insureds vehicle is vandalized, stolen or set on fire.

The third party insurance policy covers the insured (second party) only for damages to the other motorist’s (third party) vehicle and for the injuries sustained by that very motorist if it transpires that the accident was caused by the insured. But this type of policy does not cover the insured for the damages to his vehicle caused through the result of the accident. If the other motorist is the cause of the accident, then the insured will need to recoup his losses (damage to his vehicle and for any injuries sustained therewith) from the other motorist’s insurer.

The last type of policy, the third party fire and theft insurance policy, has exactly the same features as the third party insurance policy but for one exception. An additional premium cover has to be obtained so that the insurance company will be able to pay out if the insureds vehicle is vandalized, stolen or set on fire.

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