Comprehensive vs third party car insurance |28 May 2022

For many years there has been a significant increase in the number of vehicles which are being operated and entering the country. With this, the risk of being involved in a car accident or encountering other road dangers are higher.

Having the right car insurance can protect you, your family members, your passengers and other drivers against financial loss in the event of an accident or theft. By paying a premium with an insurance company they will in return pay for your losses as outlined in your policy and this may save you the hassle that can be incredibly time-consuming and tedious.

With the appropriate coverage, you can avoid negotiating with other drivers and property owners involved in the accident and manage the costs of repairing or replacing your vehicle.

Everyone makes mistakes. But sometimes another driver’s mistake can become your problem.

With the right type of car insurance, you can feel confident and have peace of mind.

Is it mandatory to have a car insurance?

In almost every country including Seychelles, it is mandatory to have a car insurance. By investing a small amount now in your own protection can help you avoid costly expenses in the future.

Furthermore, depending on what type of coverage your car insurance contains, you could be protected from a variety of perils, such as:

• Fire
• Theft
• Vandalism
• Malicious act

What happens if you get into a car accident and you do not have car insurance?

If you do not have car insurance and you are involved or cause an accident, you could be liable to pay for all of the damages and injuries or you may face a fine of R100,000 and imprisonment for a term not exceeding one year as per Section 119 of the Seychelles Insurance Act, 2008.

Furthermore, the law states that you are liable for the damages done to another person and their property in a car accident you cause. So, if you do not have insurance and you cannot afford to pay for the other driver’s repairs and medical bills, you could end up in jail, or a court could decide to charge you for the associated costs of the damage incurred.

What are the types of car insurance available in Seychelles?

There are two types of car insurance policies currently being offered by various insurance companies in Seychelles. These are comprehensive and third party covers which both have their advantages and disadvantages.

What is a comprehensive insurance coverage?

A comprehensive insurance coverage helps cover the cost of damages to your vehicle when you are involved in an accident that is not caused by a collision. It covers losses like theft, fire, vandalism, flood storm, and also have additional covers for windscreen, loss of use and personal accident.

What is the benefit of a comprehensive insurance?

It is the highest level of protection you can give your car. If you are found to be at fault in the event of an accident, with a comprehensive car insurance, you can claim for losses incurred in such situations.

• It covers lawsuits, including legal fees brought against you as a result of an accident.
• It provides peace of mind and financial protection.
• It offers financial aid in case your car is written off.
• It allows you to either claim a reimbursement from the insurance company later or take your car at a network garage for cashless repair of the vehicle.

What is the disadvantage of a comprehensive insurance?

The disadvantage of comprehensive coverage is the higher price of the premiums that exceeds the cost of collision coverage.

What is a third party insurance coverage?

A third party insurance coverage is the basic insurance cover that takes care only of third-party damages. The recipient of the claim is not the policyholder but another person or vehicle affected by the first party's insured car.

What is the benefit of a third party insurance?

It protects you against any legal liability, accidental liability, or property damage in case of an unfortunate event. This policy also covers medical expenses in case a third party is injured in an accident or dies.

What is the disadvantage of a third party insurance?

A major disadvantage to having third party car insurance is that you are not covered for any damage to your vehicle in an accident where you are at fault. This means that you will have to pay for any repairs to your vehicle out of your own pocket.

So, if you are having any doubt about which insurance cover to choose or maybe you would like to change your insurance cover; please ensure that you:

• ask your insurance service provider for detailed information; and
• always shop around different insurance companies to see what is the best offer you can get that will better suit you in the long run.

Contributed by the Financial Services Authority