Third party v fully comprehensive insurance
Is third party insurance always cheaper than fully
comprehensive?
Third party only should be cheaper, but according to this is
not always the case.
Let’s understand the difference between policies. The law
demands you have third party insurance which covers the cost to others (the
third party) of the damage and injury you cause through your own fault. Your
own vehicle is not covered by your own policy.
Next you can add to the third party policy, fire and theft
being the usual sensible additions.
A fully comprehensive policy has everything above, and then
includes cover for your own vehicle damage, regardless of who was at fault.
Your vehicle is covered up to its market value at the time of the damage. You
can add extras like motorcycle helmet and protective gear.
So it looks like the insurance company is at risk of paying
out more, so the premium should be higher.
Our friends at have researched 1.4 million annual car
insurance policies and the result challenges what we might have expected.
On 30 June 2010 Felicity King-Evans wrote for the comparison
website.
Analysis has found that in actual fact, fully comprehensive
cover is often the cheapest, despite offering the highest level of protection.
So how can this be possible?
To find out run a quote for yourself covering all the
options. The average driver will find that their car insurance premiums rocket
if they search for third-party-only cover.
But why? It’s always been assumed that the less cover you
buy, the cheaper the policy.
Steve Sweeney, car insurance expert, explained: “In recent
years, drivers with a more ‘risky’ profile, such as younger motorists or those
with driving convictions have opted for this cover to keep the cost of motoring
down.
“Providers have reacted to this perceived increase in risk by
driving up the cost of third-party only cover.”
After all, insurers are in the business of assessing risk.
For example, there’s a higher likelihood of accidents among teenage drivers, so
they are charged more. So, if car insurance providers realise that motorists
buying third-party
insurance only cover are more likely to be involved in accidents, they will
rack up the price accordingly – and that’s what’s happened.
Third-party only cover costs an average of £1,927 a year,
which is a whopping 109% more expensive than average fully comp cover at £922 a
year. The average premium for third party, fire and theft stands at £1,348 –
nearly 50% more than fully comprehensive.
It’s not just that riskier drivers go for these policies,
driving up the average cost. By choosing third party cover, experienced drivers
fall into a riskier category in insurers’ eyes – the result of which is a
higher premium for the individual.
[Source: http://www.yourkey.info/is-third-party-insurance-always-cheaper-than-fully-comprehensive/]
If you meet with unfortunate incidence and it happens to be other person’s fault then this is how you can make third party insurance claim. A victim, owner of the property, or the legal envoy of the deceased person can make an application for a third-party claim against the vehicle owner. To file a third party claim, an FIR must be filed with the police.
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