There is no way around it: if you are a driver, you’ll need car insurance. But, with rates set at over $1,070 a year and rising, car insurance premiums represent a major expense for all households. So, it just makes sense to look for a compromise between reliable coverage and a plan you can afford!
But when it comes down to choosing between comprehensive insurance and third-party liability, there’s more to look at than just yearly rates.
Here’s what you need to know to make the best choice for your needs.
Before We Start: Finding the Best Value Car Insurance, e.g. in the UAE
Finding the best value car insurance for your needs it’s all but easy – especially as each driver has unique coverage needs. Even more importantly, picking a policy that offers the most value for money does not mean sacrificing protection to reduce your monthly costs!
Some tips to reduce your insurance rates without compromising on quality include:
- Customize your policy and choose add-ons wisely
- Increase your deductible amount – but only if you can afford it
- Take advantage of No-Claim Discounts
- Choose to drive a less expensive or safer car
A great strategy to save more on your plan is to choose a local provider and compare plans. For example, if you are looking for car insurance in Dubai, online car insurance providers can best meet your needs as a UAE driver and can help you access instant quotes, customize plans, and compare different options.
What Is Comprehensive Car Insurance?
Comprehensive car insurance it’s exactly what it seems: an insurance plan that covers you, your vehicle, and other parties involved in an accident.
Comprehensive insurance policies will guarantee a pay-out in the cases of damages to properties and people caused by insured events (like road accidents, theft, and weather-related damage) regardless of whether you are at fault or not.
Both third-party liability insurance and cover for damages you and your car have reported are included in comprehensive insurance plans.
The Benefits of Comprehensive Car Insurance
Comprehensive car insurance can be a convenient choice – especially if you choose to drive an expensive car that, if involved in an accident, can be costly to repair.
Some of the benefits worth mentioning include:
- Coverage for losses reported by all parties involved in an accident
- Availability of no-claim bonuses and add-ons such as Breakdown Assistance and zero-depreciation cover
- Financial protection against out-of-pocket expenses and third-party liabilities
- Protection for damages caused by natural disasters, weather events, theft, and fire
- Allows for Insured Declared Value (IDV) and maximum claim customization options
- Can be more cost-effective than third-party insurance
Comprehensive policies don’t usually cover damages caused by DUI, driving without a license, or contributory negligence.
What Is Third-Party Liability?
Third-party cover is a type of liability insurance designed to only cover the damages reported by other cars and people in an accident, including property damage, loss of property, death, or bodily injury.
Third-party liability is the minimum amount of coverage required by most countries and it allows you to drive legally on most roads, but it does not protect you against the damages you or your vehicle might report in an accident, which you’ll have to afford as an out-of-pocket expense.
Usually, third-party liability does not cover damages caused by events like theft, fire, hail, cyclones, floods, or storms.
Pro tip: while one of the main motivations for people to choose third-party liability over comprehensive insurance is its perceived low cost, estimates show that, in some cases, the latter can be more affordable. For example, for young drivers, third-party only cover can be 84% more expensive than comprehensive insurance.
The Benefits of Choosing Third-Party Liability
Third-party liability is a straightforward cover with minimal customization options which might be beneficial for careful road users who choose to drive an inexpensive car model and can afford the damages reported in an accident.
Some of the benefits of choosing third-party-only insurance include low monthly rates and the ability to drive legally on most national and international roads.
Comprehensive Car Insurance vs Third-Party Liability: Which One To Choose?
When choosing what to insure your car for, it’s important to consider multiple factors, including your experience, the value of your car, and your ability to afford out-of-pocket expenses such as car repair and medical costs.
The best combination of cover and value is the one that protects you against major costs and liabilities while also making it easier for you to afford monthly or yearly payments. A lot will depend on your history as a driver and the type of car you drive – but make sure to compare different options!