Know the difference between Comprehensive Cover vs Third Party

Quite often, car owners are looking for ways to reduce the cost of car ownership and naturally, one of the easiest ways to reduce costs it to scrutinize your insurance premiums and possibly look for ways to reduce the cost.  However – before you decide to jump ship on your comprehensive cover in favour of the cheaper third party insurance cover – you need to understand they that are two very different things and as is always the case – you get what you pay for.

Before we can compare the difference, let’s take a quick look at these two types of car insurance products and what they do for you.

3rd Party Insurance Covers you for:

Nothing! Yes, it’s true – if you crash your car or if someone crashes into you and you only have 3rd Party Cover – you will have to repair your car at your own cost. The other person, or party as it’s know – is covered, so your insurance covers your liability. In other words – your insurance will pay to have their car or property fixed (but not yours).  So this is the bare minimum that you should be insured for – even though South African law does not require that you have any insurance.  Be safe – it’s actually very cheap and a wise purchase.

The products do get better – the next insurance product does offer you some cover – so long as you are a safe driver.

3rd Party Fire and Theft

This is the same as per above, but you now have the added benefits of YOUR CAR being insured in an accidental fire – or if your car is stolen (which would be terrible, but happens quite often in South Africa).  It’s also quite common for you to increase the amount of cover, usually R5, R10 or R20 million “for a small additional fee”. Quite often, 3rd Party Fire and Theft insurance is one of the cheapest forms of insurance cover for your car, albeit limited.

Full Comprehensive Cover

This is the real deal – it covers you and the other party in case of fire, theft and accidental damage.  Some insurance companies bolt on top up products like medical cover and cash back schemes for no claims and car hire in case of an accident.  They really do all differ so it’s best to try and compare

Also be aware that the Excess – the amount YOU need to pay to make a claim – can differ quite a bit.  Some insurance companies offer cheap monthly premiums and VERY expensive excess. So you need to be wise to this too.

If I were shopping around for car insurance today, I would draw 3 columns and write down for each insurance company:

  • Monthly Premium:
  • Excess Cost:
  • Additional Benefits:

Personally I don’t rate the whole Cash Back scheme very much as it prohibits you from making a claim – which is why you have insurance in the first place!  The additional benefits are nice – but really just focus on the premium and excess first.

And Now – The Difference between 3rd Party and Comprehensive Car Insurance:

Yes, it took some time to answer this question – but here it is.
Comprehensive will fix your car and the other persons car and property v.s. Third Party will only fix the other persons car and property.

I hope this helps you make the right decision and remember to get a few quotes at least.

A Little Know Fact

In Australia, Third Party Insurance does not cover the damage to the other vehicle, only the people who are hurt in an accident. It’s also included when you renew your car registration fees. That’s quite a bit different from the South African Third Party Cover where the other vehicle is covered (in this instance, South Africa is better).

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