Before enumerating the benefits you derive from third-party car insurance versus comprehensive car insurance, let’s first distinguish between the two and then hit the ground running.
Third-party car insurance is also known as a liability-only cover because it is a kind of insurance cover that protects you from having to pay for vehicle damage if you’re ever at fault for hitting and damaging another vehicle with your car.
In this scenario, your insurance company pays for the full repair and restoration of the vehicle of the other party – but your own car is not repaired if it is also damaged in the incident.
Comprehensive car insurance, on the other hand, gets your insurance firm to pay for the repairs of the other vehicle, your own damaged vehicle, and even the medical bills of anyone injured in the accident.
What then are the benefits of third-party vehicle insurance?
1. It is the minimum legal insurance requirement in any state: It is the minimum insurance requirement for any car user in any state and in most countries of the world. While it does not necessarily protect you or offer you any compensation in the event of an accident, it protects and offers compensation to the other party whom you damaged his car.
2. It is much cheaper: It is the cheapest form of vehicle insurance required by the law in any state and designed for those with very low funds to sign up for comprehensive car insurance. It is also very ideal for car owners with old vehicles where the cost of comprehensive cover is higher or greater than the market value of the vehicle.
3. It gives peace of mind: It gives you peace of mind that you can’t get into any serious trouble for involving in an auto accident and damaging the other car without some financial institution coming out to help you cover the repair bills. It is the best method of risk management when you’re driving on the roads.
Third-party car insurance has no disadvantage at all except for the feeling that you’re paying for a service that will not directly benefit you, but then it does because you’d have to personally pay for repairing the other party’s car or be taken to court. So it is always better to be prepared because a collision or crash might happen anytime or anywhere with serious consequences on lives and property.
Pros and Cons of Buying a Comprehensive Car Insurance Plan
While a greater percentage of car owners buy the third-party car insurance plan to protect third-party vehicles in the event of a car accident, a few others opt for the comprehensive car insurance plan that offers greater protection and value than is obtainable under a third-party insurance scheme.
Third-party vehicle insurance allows your insurance company to repair damage to any other car(s) with whom you’re involved in an accident – but not your own car; but comprehensive auto insurance offers a wider coverage such as theft, vandalism, flooding damage, fire damage, animal attack, or any other incidents on your car.
However, the following are the pros and cons of buying a comprehensive car insurance plan against a third-party vehicle insurance option:
1. Comprehensive cover is much better and offers greater protection if you have a brand new car, or use an expensive car. If the cost of repairing any damage to your car, or even entirely replacing the damaged car with a new one is very high, then comprehensive car insurance offers you the best bet.
2. One advantage of comprehensive auto insurance is that you do not have to prove who is at fault in an accident. Even though you are at fault, it does not matter because you are covered in any comprehensive car insurance.
3. If you happen to purchase a new car with a vehicle loan, or you lease the car from finance experts, you might be mandated to secure it with comprehensive insurance in any unforeseen calamity befalls it. This is a disadvantage to you because you bought the car with a loan which must be serviced until it is paid off, and you are mandated to pay a higher premium for comprehensive insurance which actually protects you and your financiers if anything happens to the car.
4. There is no point saying this, but the fact remains that comprehensive auto insurance is much more expensive with higher premiums – its benefits and coverage notwithstanding.
5. Another disadvantage of comprehensive car insurance is that certain professionals believe it does not include third-party damage to your car when it is involved in an auto accident or any form of damage resulting from motor accidents. But only covers thefts, vandalism, and attacks on your car among others.
Comprehensive car insurance remains the best form of auto insurance if you can afford it, but if not you must go for third-party auto insurance because it is much cheaper and the minimum requirement for car insurance in any state.
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