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motor insurance (do you know what you have bought?)

Updated on August 4, 2017

Do you know what you get and what you don't get for your money?

Everyone who has bought a car has (I hope) also bought car insurance. But it is surprising how often people don’t actually know what they have bought. And when they ring their insurance company to make a claim they discover to their surprise that their policy does not cover everything that they assumed it would. So to explain…

There are three types of cover.

Comprehensive

Covers damage to the bodywork of your car regardless of how it was caused (just as long the policyholder didn’t actually damage his own car deliberately). An obvious point perhaps but worth mentioning in passing nevertheless.

Third Party Fire & Theft

You are only covered for damage to your car caused by a fire, the theft of the car or damage caused by someone breaking into it to steal something from it. This policy will not cover any damage caused to your car in an accident involving another vehicle (and this includes vandalism by the way) or if it is damaged by an object hitting it.

Third Party Only

There is no cover for damage that might be caused to your car.

But…

All of these types of policies do have one thing in common though; they protect you against a third party who wishes to make a claim against you for damage that you might have caused to their property and for any injury to them that might have resulted.

(For your information: you are the 1st party. Your insurance company is the 2nd party and the other person involved in the accident with you is the 3rd party).

What does this mean if you have to make a claim?

Even if you have a comprehensive policy not everything is covered . The policy only covers bodywork damage to your car and nothing else. You wont be covered…

- If your car breaks down. (If your battery is dead or your radiator starts leaking that wont be covered under your policy).

- Mechanical and electrical faults are excluded from your cover. (If a fault develops with your air conditioning or engine management system that wont be covered).

-Wear and Tear is not covered. Your car door is damaged in an accident and the winding mechanism for the window was also broken at the same time. The damaged door is covered under your comprehensive policy but if the insurance engineer decides that the winding mechanism was not in fact damaged in the accident but broke due to wear and tear then this will not be covered under your policy.

- If it can be shown that an accident was caused as a direct consequence of your vehicle being poorly maintained (you were unable to stop in time because your tyres were bald) then your claim may well be repudiated by your insurance company.

- Only damage that was actually caused at the time of the accident is covered. (If your front bumper is dented your insurance company will only pay for the repair to that dent but not to the other scratches that happened months earlier).

- Having a comprehensive policy does not entitle you to a hire car. That is a benefit that an insurance company may choose to give you or not as the case may be. And if it does then they decide what hire car you get and how long for. A benefit is not a right that you are entitled to or can demand.

If you only have Third Party Fire & Theft cover the only cover you have is if your car is damaged by fire or stolen or broken into (to steal items from inside the car). The insurance engineer will look for signs of a break in, either by looking for evidence that the door was forced or that the locks were tampered with for example. If there are no signs of damage your claim may well be repudiated.

-You will be covered if your car is damaged by fire but not if the fire was caused by a mechanical or electrical fault. The source of the fire wont be covered but the damage caused by the fire will be. In other words, if the wiring loom catches fire and is destroyed it will not be covered but any damage it caused to, lets say, the interior of the car will be covered.

Finally, Third Party Only cover. Everything is excluded. Under your policy there is no cover for damage to your car. But you will still be covered in the event of an accident in which a third party wishes to make a claim against you for damage and or injury you may have caused.

Policyholders are sometimes tempted to threaten to take their business elsewhere if their insurance company does not do what they want. Everyone has that right of-course but this will be of little use. All Comprehensive policies are exactly the same and so are TPF&T and TPO policies. What they cover and exclude doesn’t differ either.

The only difference between one insurance company and the next are the benefits that they may wish to offer in order to get your business or how big a discount they are prepared to make on the premium they want to charge in order to get your business. Your best protection against any disappointment is to know what you want and be sure that you have it. So be clear about what you want and then to read your policy documents to make sure you have it.

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