There are several types of insurance that relate to motor cars and motor car accidents. One relates to personal injuries from car accidents, the others relate to property damage. As they are often confused, it is useful to distinguish between them.
- Transport Accident Commission Levy. Often called compulsory third party, this must be paid at the time of your annual renewal of car registration. The Levy only covers claims against you by other persons for personal injuries.
-
Property Damage Insurance. At the moment, this is not compulsory but only the most foolhardy deliberately choose to go without cover. There are three types of property damage insurance, as follows.
- Comprehensive. This is top of the range. It covers you for damage to your own property as well as for damage you may cause to the property of others.
- Third Party, Fire and Theft. The middle range insurance. It covers claims against you by other persons for damage to their property and in addition covers loss or damage to your own vehicle in two situations, i.e. fire and/or theft.
- Third Party Property. This is the minimum cover available. It covers claims against you by other persons for damage to their property. It covers your repairs to a limited amount only when the other driver caused the accident and can be identified, and is uninsured. This limited benefit is known as the Uninsured Motorist Extension (UME). If your car is not worth insuring, or you cannot afford comprehensive insurance, then you should have this insurance at least, since you could be liable for enormous amounts if, for example, you ran into a BMW. This type of insurance costs only a fraction of the amount charged for comprehensive insurance. Also, most insurance companies will give a ratings credit on a comprehensive policy when you upgrade in the future.
When shopping for insurance, look at benefit as well as price – things like "market value" or "agreed value" if the car is a total loss, availability of a hire car, whether you have choice of repairer and amounts claimable if personal goods are lost.
An insurance policy will require you to report any accident or damage as soon as possible after the accident. If you do not intend to make a claim, at least make a telephone report. Be sure to get the name of the person who accepts the report.
Normally, insurance policies state that you are not covered if at the time of the accident the car was being driven by a person who:
- had a blood alcohol content (BAC) exceeding the legal limit;
- was driving under the influence of intoxicating liquor (or drug); or
- refused to undergo a breath test.
Your claim may also be unsuccessful if the damage was sustained while the car:
- was being used for racing etc.;
- was overloaded or in an unsafe or unroadworthy condition;
- was being driven by an unlicensed driver; or
- had been modified in any material way from the manufacturer's specifications.
In addition, if you have failed to disclose:
- the correct purchase price;
- your full driving history; or
- any drivers under 25 years old,
then your claim may be reduced or denied or extra premium charged.
Always read the policy carefully to check policy exclusions and/or endorsements, and if in doubt seek clarification, in writing, from the insurer.
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INSURANCE :: Last updated: Thu Jul 1st 2010