If you’re in the market for car insurance you might be confused at the difference between CTP, third party and comprehensive policies.
We’re going to be honest with you shopping for car insurance can be overwhelming, tedious and at times a bit boring, but it’s something that everyone with a car has to do.
Luckily, we consider reading about car insurance to be one of our favorite pastimes – seriously – so, let’s cut through the fat. It’s time to learn about car insurance in under three minutes.
Quick Guide On Car insurance
[lwptoc]
Compulsory Third Party Insurance
So, first we have compulsory third party insurance otherwise known as CTP or green slip. This bad boy is mandatory for every driver in USA.
CTP covers your liability for someone else’s injuries in an accident. So, basically, if you get into a car crash and the other driver is hospitalized this cover will cover the medical expenses.
But CTP won’t cover the damages to your car or theirs. So, if you get into an accident with a flash new Lamborghini, or you’re lucky enough to own one then you’re going to have to pay for the damages right out of your own pocket.
Third party property damage insurance
Unless you’ve got… Third party property damage insurance. That’s a mouthful! This level of cover isn’t mandatory but if you want to avoid getting in a financial pickle it’s a pretty good idea.
It’ll also cover you for any damages you might cause to someone else’s vehicle or property as a result of an accident.
So, remember that Lamborghini that we were just talking about? Your insurer should cover you for that – what legends!
Third Party Fire And Theft Policies
But hold on to your seats guys there’s more. Unless you’ve got third party fire and theft policies the chances are that you’re still going to be out of pocket after an accident.
Car insurance policies aren’t very cryptic, so as the name suggests you’re covered for fire and theft which are two of the more common things that can happen to your car in an accident.
You’ll also be covered for the perks of a third-party property damage policy. It’s a pretty good option for those who can’t afford a comprehensive policy but need a little bit more protection than a third party property damage policy.
Not too much, not too little, it’s just right. Even Goldilocks would approve.
Comprehensive Car Insurance
But if you have the budget for it comprehensive car insurance is the way to go. This one is basically the bee’s knees of car insurance policies. Bees don’t have knees.
Think about is that best mate that’s always there to get you out of trouble.
Collision
This bad boy covers you for a bunch of things: Collision: the cost of repairing or replacing your car plus any damages to other people’s property.
Accidental damage like the time you accidentally backed into the pole in the carpark. Severe weather damage like floods, storm damage, hail and more. And third party property damage AKA legal liability.
Conclusion
Many comprehensive policies will also cover you for things like if you lose your keys, need emergency repairs, towing expenses and roadside assistance.
Also, some policies will give you a switch replacement vehicle if your car does need to be repaired overnight.
So, what have we learned?
- Number one: you need to have CTP if you want to drive a car.
- Two: third-party property damage policies will cover someone else’s Lamborghini but not your own.
- Three: Goldilocks approves of fire and theft policies.
- And four: comprehensive is the bee’s knees.
But long story short no matter what car insurance policy you decide to take out it’s important to compare your options online and get the best value for your money.
That’s it for now. We would love to know your thoughts so feel free to share them in the comments below. Share your thoughts with us. Check out our blog for more articles.
FAQs
1. How many kinds of insurance are there?
There are, 4 types of insurance that most financial professionals recommend we all have: life, health, auto, and long-term disability.
2. What type of insurance is most important?
Health insurance is arguably the most significant kind of insurance. A 2016 Kaiser Family Foundation/New York Times survey discovered that 1 in 5 people with medical bills filed for bankruptcy. With a saying like this, funding in health insurance can assist you to control a significant financial difficulty.
3. What is insurance and its importance?
Insurance gives you financial support and decreases uncertainties in business and human life. It gives you safety and security against special events. Insurance gives a cover against any sudden failure. For example, in the case of life insurance financial service is provided to the family of the insured on his death.
4. Why should I get insurance?
Health insurance to cover medical expenses for you, as well as your spouse or children if you have them. Life insurance to provide for you and your family or cover your debts after your death.
5. Is driving without insurance illegal?
You can’t drive or allow somebody else to drive a car or licensed trailer on a public street unless there is insurance for third-party risk, i.e. third-party insurance that will protect damages to somebody else or someone else’s belongings.
6. What happens if you don’t have insurance?
Without health insurance protection, a severe misfortune or a health issue that results in emergency care or a costly treatment can result in insufficient credit or even bankruptcy.
7. How insurance can help me?
General insurance covers you and your assets from the financial threat of something going wrong. It cannot stop something from happening, but if something unforeseen does happen that is protected by your policy it means you will not have to pay the full price of a loss.
8. Why is health insurance so expensive?
The expense of medical care is the single biggest aspect behind U.S. healthcare expenses, accounting for 90% of spending. These prices reflect the expense of caring for those with chronic or long-term medical requirements, an aging population, and the raised cost of new medicines, methods, and technologies.
9. What are the principles of insurance?
In the insurance world, six basic principles must be met, which means insurable interest, Utmost good faith, proximate cause, indemnity, subrogation, and contribution. The right to ensure arises out of a financial relationship, between the insured to the insured and is legally acknowledged.
10. What is the main purpose of insurance?
Its aim is to reduce financial uncertainty and make accidental loss manageable. It does this substituting payment of a small, known fee—an insurance premium—to a professional insurer in exchange for the assumption of the risk a large loss, and a promise to pay in the event of such a loss.
11. What are the 7 principles of insurance?
To ensure the proper functioning of an insurance contract, the insurer and the insured have to uphold the 7 principles of Insurances mentioned below:
• Utmost Good Faith.
• Proximate Cause.
• Insurable Interest.
• Indemnity.
• Subrogation.
• Contribution.
• Loss Minimization.
12. What is the difference between travel insurance and travel health insurance?
International health insurance is created to provide a comprehensive level of health care to people relocating from their home country for a sustained period of time, whereas travel insurance provides coverage for emergency treatment while you are in another country for a shorter space of time.
13. What is the advantage of insurance?
The obvious and most significant advantage of insurance is the payment of losses. An insurance policy is a contract utilized to indemnify individuals and organizations for covered losses. The second advantage of insurance is managing cash flow uncertainty. Insurance gives you payment for covered losses when they happen.
14. What do you mean by insurance?
Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients’ risks to make payments more affordable for the insured.