November 24, 2020
Some motorists might shy away from the idea of car insurance because they believe it is too expensive. However, that may not always be the case. We are still being impacted by the pandemic in South Africa, especially from a financial point of view. Third-party car insurance is an affordable product for motorists, so much so that it is compulsory in some countries such as Australia.1 In the following paragraphs, we will look at what benefits third-party car insurance has compared to comprehensive car insurance.
The type of cover is the key differentiator between third-party car insurance and comprehensive car insurance.2 Another way to describe ‘cover’ is the degree or extent of financial protection provided by the insurer to a motorist. Third-party car insurance covers you financially for damage and loss caused to a third-party car, but your car is not covered. Comprehensive car insurance, on the other hand, provides a lot more cover for your car, premiums for comprehensive insurance however are usually slightly higher.
The most significant benefit of having third-party car insurance is that the motorist is at least covered for damage and loss sustained by a third party’s car. Can you imagine crashing your 15-year-old car into a brand new Mercedes Benz and you are not covered in any way? The financial aftermath is too awful to contemplate. Damage to a Mercedes Benz could cost hundreds of thousands of Rands to repair. How will you be able to raise that kind of money to pay for such damages? For most motorists, this would be almost impossible. The third party could sue you for damages done to his or her car. So why not spend a small premium every month on third-party car insurance if that is all you can afford? Third-party car insurance may offer a growing cover component that covers damages to your car, depending on your insurer.
Knowing that you are enjoying some cover against the unknown motorist out there may provide peace of mind. Yes, in an accident you may lose your car, but at least that is your situation for you to handle, and not somebody else’s.
Most motorists, if not all, can afford to pay a monthly premium for third-party car insurance. Countries such as Australia1 would not make it compulsory if the average motorist could not afford it. Even if you have to forego some luxuries for the sake of the premium, it will be worth it. Remember, the benefits of paying a monthly premium outweigh the cost of causing considerable damage to a third party’s car.
Perhaps you would like to buy third-party car insurance? Why not consider getting affordable car insurance with PMD, which includes benefits like fixed premiums and more. T’s & C’s apply.
Car insurance is complicated, and thus this article should be seen only as information. However, if you want to purchase a car insurance product, a certified, financial advisor will be able to assist you with professional advice.