A motor insurance policy is a mandatory policy issued by an insurance company as part of the prevention of public liability to protect the general public from any accident that might take place on the road. The law mandates that every owner of a motor vehicle must have one motor insurance policy.
You have to take a motor insurance cover before you can drive your vehicle in a public place. It protects you, your vehicle and other motorists against liability in case there is an accident. It provides financial compensation to cover any injuries caused to people or their property.
1) Third party only
This cover is the legal requirement. This level of cover ensures that compensation is available for injury to other people (including your passengers) or damage to other peoples' property resulting from an accident caused by you. It doesn't cover any of your costs as the result of an accident. Most insurance companies offer additional levels of insurance cover that go beyond the legal requirement. The precise nature of cover will vary from company to company.
2) Comprehensive
This provides the same cover as third party fire and theft. However, it also covers you should your vehicle be damaged in an accident. Many additions to this level of cover are available from insurance companies including:
- Providing a courtesy car while your car is being repaired, legal expenses, insurance to recover your uninsured losses (such as your excess)
- Roadside recovery schemes
- Vehicle repairs in case of breakdown
- Theft
- Vandalism
- Fire
- Natural disasters (like a hurricane or a tornado)
- Falling objects
- Damage done to your car by animals
- A civil disturbance (like a riot that results in damage or destruction of your car)
- In case of vehicle theft, caught on fire, vandalism
- In damage due to natural calamities.