MOTOR INSURANCE

MOTOR INSURANCE

What is Motor Insurance?

A motor insurance policy is a mandatory policy issued by an insurance company as part of prevention of public liability to protect the general public from any accident that might take place on the road. The law mandates that every owner of a motor vehicle must have one motor insurance policy.

Why Motor Insurance?

 The owner of the vehicle's legally liable for any injury or damage to the third party life or property in a public place. Driving a motor vehicle without insurance in a public place is a punishable offense in term of the motor vehicle act.

Types of Motor Insurance

There are four types of motor vehicle insurance: Compulsory Third Party (CTP) Insurance; Comprehensive Insurance; Fire and Theft Only; and Third Party Property Only. Consumers should shop around and ensure they purchase cover appropriate to their situation.

• CTP is mandatory in all States and Territories and provides compensation for bodily injuries caused by vehicles. It does not provide cover for any damage to the vehicle and therefore other forms of motor vehicle insurance should also be purchased.

• Comprehensive Insurance can cover damage to vehicles, theft of vehicles, collision, malicious damage and weather damage. Depending on the policy, it can cover damage caused to other vehicles.

• Fire and Theft Only is a limited form of insurance that only covers for fire damage to, and theft of, vehicles. It does not cover collision damage to vehicles.

• Third Party Property Only provides cover for vehicles damaged by the policyholder's vehicle. It does not provide cover for the policyholder's own vehicle. This product is generally only taken out by consumers with a low value vehicle, protecting themselves against damage to other motorists.