Although we are advised to always keep our eyes on the road to stay alert, we tend to let our guard down when we get used to driving. This change in mental state is possibly due to desensitization. This happens when driving becoming an automatic process, which leads to a decrease in alertness or attention. When this happens, there is a possibility that accidents will occur. You could crash into a road signal, or worse, collide into another driver— leading to the issue of medical and property damage compensation and legal liability. The best countermeasure you should take to avoid this is, of course, to be mindful of your surroundings. The second best measure is to get third-party insurance.
Third-party insurance is necessary to protect you against any legal liability, accidental liability, or property damage in case of any unfortunate events. If you’re new to driving, you may not be too familiar with third-party insurance. Therefore, we have compiled everything you need to know about third-party insurance—from the basics to its benefits.
What is Third-party Insurance?
In a nutshell, third-party insurance is the fundamental level of coverage needed to drive a car. As its name suggests, this insurance provides coverage for accidents which involve a third-party. This includes coverage for when you damage or injure other individuals while driving, including your passengers.
Why get Third-party Insurance?
Aside from third-party insurance, there are two other types of insurance, namely, the fully comprehensive, and the third-party, fire and theft. Each of these insurances has a distinctive difference. Third-party insurance differs from the other two in terms of its coverage— it specialises in providing coverage to third-parties but has no coverage for any damage done to your vehicle. If you’re not sure if third-party insurance is for you, worry not, this simple checklist may help:
- Can you afford to pay repair costs for your car without needing to claim from your insurance?
- Are you often involved in accidents?
- Are you a high-risk driver?
If you have answered yes to at least one of them, you might need third-party insurance. Since this insurance caters to high-risk drivers, you might think it has a higher annual or monthly insurance fee as compared to other car insurance policies. That is partially correct, as the risk costs are built into annual or monthly payments. This means that you may even end up needing to pay less than when if you claim from other policies.
What is and isn’t covered by the Third-party Insurance?
Now that you have a rough idea of what third-party insurance is, it is time to explore the specifics. Many insurance companies offer third-party insurance, so there may be slight variations in their policies. Even so, all third-party insurances are built on the same core concepts. Third-party insurances generally provide coverage for:
- Injury to a passenger or a person in another car
- Damage to another person’s car
- Damage to another person’s property, including driving into their wall
However, third-party insurances they do not cover for:
- Any medical or legal costs for your own injuries, including physiotherapy
- Damages to your car in an accident that you caused
- Damages to your car if it is stolen or destroyed by fire.
- A different car to the one listed in your policy which you were driving at the time of the accident
- Damages to your personal belongings
- Damages to your windscreen
Depending on which insurance plan you choose, there may be add-ons such as coverage for personal protection. So when choosing an insurance plan, make sure to read through the policy documents thoroughly.
How does Third-party Insurance Work?
Moreover, third-party insurance allows you to make the third-party pay for injuries and losses you have sustained when they are at fault. In this case, you have to claim directly from the third-party’s company. Here is a step-by-step guide:
- Make a police report: It is best to make a police report within 24 hours of the accident; again the RM300 fine is applicable here.
- Prepare the documents needed: Take a photo of the damaged part with the car’s license plate and of the whole car with the number plate.
- Send your car to the panel workshop: You should send your vehicle to the panel workshop of the third party’s insurance company immediately.
- Get a licensed adjuster: You should get a licensed adjuster to help determine the total cost of the damages, and Compensation for Assessed Repair Time (CART). CART is usually based on the number of days required fix your vehicle. However, insurance companies may authorise an additional seven working days in case of unforeseen events. PIAM’s website provides a standard gauge of daily CART.
- Submit documents to the third party insurer: Send the necessary documents to the third party’s insurance company. The documents are:
- Copies of your NRIC and driver’s license
- Original copy of police report you made
- Keputusan report issued by the police department
- Car registration card
- Report by the appointed licensed adjuster including bill of repair cost for your vehicle or property
- Photos of damaged car
Extra step! If the amount offered by the third-party insurer is insufficient, you may need a lawyer. In this case, you have to sign a warrant to act. This is a document that provides consent for them to act on your behalf.
This process may seem complicated, but it is necessary in order for you to receive the compensation you deserve.
Benefits of Third-party Insurance
If you are still not convinced that you need third-party insurance, we hope this last part will convince you. Though it provides a rather niche area of coverage, it still has several other benefits, which are:
- Legal coverage and financial assistance: As explained above, this type of car insurance covers your legal liability in case of injury or death to any third party. Also, it protects you against claims of loss or damage to the property of third parties, and any legal and financial liability.
- Peace of mind: Having an ace up our sleeves helps us to feel more at ease. The third-party insurance does precisely that. With the third-party insurance, you are safe from any financial stress. Having this sense of relief could lead to better focus in general, including while you are on the road.
- Quick and easy process: Another attraction of third-party insurance is how quickly and easily you can attain it. Although the procedure may differ depending on the company, it is a generally straightforward and quick process. This process has become even more convenient recently, as some third-party insurances are available for purchase online.
- Affordable coverage: You should not worry about whether the third-party car insurance is worth paying for as the premium paid for this cover is usually reasonable. However, this may vary between insurers and is often dependent on the model, variant, and make of the car. Therefore, you are strongly advised to compare different options before making your choice.