Owning a vehicle comes with some responsibilities, including keeping yourself and other road users safe. One of the ways to maintain this is to have auto insurance. If you are a new car owner or looking to renew your car insurance, knowing the different types of car insurance will help you make the right decision. This article dives into the different types of car insurance available to choose from.
Different Types of Car Insurance
There are three main types of car insurance. They are;
Third-Party Insurance: All vehicle owners are legally required to have third-party car insurance. This insurance only covers damages done to others in an accident.
Third-party, fire, and theft: This insurance offers third-party protection as well as protection from fire damage and/or theft. The fire damage covered includes accidental fires and deliberate fires like arson.
Fully comprehensive: Fully comprehensive car insurance offers the highest level of protection. The car owner and third parties are covered and eligible to receive compensation for damages, injury, fires, theft, or others as specified in the policy. Under this type of car insurance, damages are catered for irrespective of the at-fault party.
Third-Party Insurance
This is the least type of insurance coverage required of all vehicle owners. This insurance coverage option offers protection to third-party road users who have been affected by the policyholder’s actions. While many vehicle owners expect this type of insurance to be the cheapest, they are often surprised to discover the truth.
For third party insurance, the typical coverage includes;
- Damage done to the third party’s car or property
- Injury caused to the third party (this may include driver and passengers)
- Injury to the policyholder’s passenger(s)
Third-party insurance does not cover the following;
- The policyholder
- The policyholder’s car
Important Note: Car owners with third-party insurance will have to pay to replace their car if stolen or damaged by fire. The policyholder will also have to foot their medical bills if injured in an accident.
Third-Party, Fire and Theft Insurance
This type of insurance offers the benefits of a third-party insurance policy in addition to coverage against theft and fire damages. This policy is recommended for vehicle owners who wish to rise above the bare minimum or those who live in fire or theft-prone areas. With this insurance coverage, you can also get compensated for damages arising from attempted theft.
For the third party, fire and theft insurance policy, the typical coverage includes
- Damage done to a third party’s car or property.
- Injury caused to the third party (this may include driver and passengers)
- Injury to the policyholder’s passenger(s).
- Fire damage – within the confines of the contract terms.
- Theft – may also include coverage for damages due to attempted theft.
Third-party, fire and theft insurance does not cover the following;
- The policyholder
- The policyholder’s car outside of damages caused by fire and theft
Fully Comprehensive Insurance
This insurance type offers the highest level of protection to the policyholder and all others involved in an accident. Fully comprehensive insurance is most recommended for customers who have purchased a new or expensive car, or those that often have expensive tech or gadgets in their vehicle.
Fully comprehensive insurance offers coverage for;
- Damages to the policyholder’s car or property
- Injury caused to the policyholder and their passengers
- Damage caused to third party’s car or property
- Fire damage
- Chipping, dents, or scratching
- Accidental damage to policyholder’s car
- Malicious damage or vandalism
- Theft or damages from attempted theft.
Important Note: Having fully comprehensive insurance doesn’t mean that you are covered for every possible kind of damage. You should review your insurance contract and purchase add-ons where necessary to ensure full coverage. Some of the damages not covered include windscreen, vehicle glass, personal belongings, vehicle upgrades, and others. For these, you may need to purchase add-on coverage.
What are the Other Types of Car Insurance?
There are other types of car insurance aside from the three major types discussed above. These other car insurance types offer varying levels of protection and extras based on the specific needs of policyholders. Some of them include;
Telematics Insurance: This is also known as ‘Black Box’ insurance and requires fitting a monitoring device to your car. The device monitors your driving and increases your chances of getting cheaper car insurance if deemed a safe driver. This insurance type is common among young drivers who are often regarded as impulsive drivers. It also saves younger drivers from expensive premiums.
European Driving Insurance: This insurance coverage is available to customers who intend to travel abroad. It offers coverage in their chosen destination.
Classic Car Insurance: Owners of classic vehicles can take advantage of this insurance cover to protect their vehicles. Classic cars are usually expensive to maintain and drive far less than regular vehicles. This insurance takes all of these into account.
Insurance Extras
Breakdown Cover: This offers protection for when your vehicle breaks down. This extra will ensure that your car is picked up and taken for required repairs.
Personal Accident Cover: This extra is often included in fully comprehensive insurance. It offers coverage and compensation for persons who have been seriously injured or died in an accident.
Courtesy Car: This insurance extra guarantees you a courtesy car after you’ve bashed or damaged yours. You’ll get the courtesy car until your vehicle is repaired.
Motor Legal Protection: This insurance extra offers financial support for legal actions after an accident. If you wish to sue another driver for your damages, this cover takes care of your expenses.
No Claims Discount Protection: This can save you a lot of money annually on your car insurance. It is often an extra that most people add on to protect themselves from more expenses later on.
Windscreen Cover: Windscreen damage may happen and can set you back a few hundred dollars. This insurance extra covers the cost of repair or replacement of the windscreen.
Lost Key Cover: Newer car models are fitted with electronic keys. The cost of replacing these keys is often on the high side and this insurance extra covers that.
Factors Affecting the Cost of Car Insurance
The cost of your car insurance is often affected by;
Policyholder’s Age: Younger drivers are more likely to face higher insurance premiums.
Previous Driving Experience: Reckless drivers with a history of accidents are more likely to face higher insurance premiums.
Location: Your location and the average insurance rate in the area can affect your insurance premium.
The Make and Model of Your Car: Recent and sophisticated cars will demand higher insurance premiums.
Car Worth: Your car’s original worth will impact your insurance premium. Expensive or luxury cars demand higher insurance premiums.
Miles Driven: Insurance companies also consider the miles driven when setting insurance premiums.
Choosing car insurance requires you to consider a bunch of factors. When looking for the right insurance cover for your needs, come speak to us at Miller Hanover Insurance or fill our form online at https://www.millerhanover.com/.
Miller Hanover Insurance, 334 High St Hanover PA 17331, 7176379265
Find us on Social Media
https://www.facebook.com/millerhanover
https://twitter.com/MillerHanover