Third Party Only (TPO)
A Third Party Only (TPO) insurance policy only covers damage that you cause another person’s vehicle and property – but doesn’t cover your damages. That’s why it’s the cheapest car insurance policy you can buy.
For example:
If you’re driving in the city and accidentally hit the car in front of you because you were changing the radio station, your insurer for the damage you caused the car in front of you. But you’ll have to pay out of pocket to fix the damage to your car because TPO policies don’t cover damage to your vehicle.
Keep in mind that if you’re still making loan repayments on your car, you can’t purchase a TPO policy.
Third Party, Fire, and Theft
A Third Party, Fire, and Theft policy is a step up from a regular TPO policy in that it also covers damage to your vehicle as well. It offers increased coverage limits and enhanced coverage, making this a more expensive policy to have compared to a TPO policy.
This policy protects you against incidents including:
- Injury and Death
- Vandalism
- Fire Damage
- Theft
Comprehensive Insurance
A comprehensive insurance policy delivers the broadest possible coverage. Comprehensive insurance is the most common car insurance policy carried by drivers because all banks require this policy when taking a car loan.
Comprehensive insurance is the most expensive coverage you can purchase because it offers the most protection for damage to your vehicle and those you accidentally damage. Additionally, there are add-ons to your policy you can buy that can protect you against the following:
- Windscreen Damage
- Riot , Strike, and Civil Commotion Damage
- Flood or Windstorm Damage
- Liability of Passengers for Negligent Damage
- Personal Accident Protection
Choosing the Right Car Insurance Policy
Selecting the best car insurance policy requires doing a lot of homework. There are a lot of insurers out there, so comparing the premiums and the types of coverage offered can be a time consuming process.
Thankfully, you can make this search a lot easier by using MoneySmart to find a car insurance policy that fits your budget and coverage requirements.
