Mon | Oct 26, 2020

Third party insurance – Is it worth it?

Published:Friday | September 18, 2020 | 12:09 AM

There is an old insurance advertisement which says – ‘… between what’s good for you and what’s right for the insurance company is US (your broker)’.

Is third party insurance really worth it? In most cases, absolutely no!

In the old days, it was hard work to find the best policy for your vehicle; but in today’s Internet age, with a little effort, there are shopping sites like www.mibinsure.com, where you can buy comprehensive insurance at almost the same cost as third party insurance. The trick is to let insurers compete for your business, not just renew your policy with the same insurer year after year.

Make no mistake about it, carrying comprehensive insurance can save you a lot of hassle in the event of an accident. If you bought comprehensive insurance, for example, and you had an accident, even if the other party refuses to admit liability, your insurance company pays your claim right away.

If, on the other hand, you had purchased third party insurance, even if you are not at fault, you could wait months to get your claim settled if the other party insists you were at fault; it gets worse if they were not insured – you never get paid.

How do I get cheap comprehensive insurance?

Let us use an example. We will call you Peggy Ann. Let’s assume Peggy Ann has the following demographics and vehicle profile:

• Car Honda Civic

• Occupation Nurse

• Age Thirty-five

• Age of car 7 years

• Value $1.7 million

• Age of driver’s licence 5 years

• No claim discount (NCD) 4 years

• Tracking device Yes

She next goes to www.mibinsure.com, clicked ‘Get a quote’ and input the above profile information.

Results of her Internet search:

Insurer Comprehensive quotes Third-party quotes

1 $32,500 $19,000

2 $34,425 $20,000

3 $35,000 $20,000

4 $45,135 $20,900

5 $49,572 $23,500

6 $49,754 $27,500

7 $55,575 $28,000

8 $78,570 $30,000

9 $68,688 $30,000

10 $69,126.75 $31,500

For $1,000 more, she could have purchased comprehensive coverage from insurer No. 1 instead of inferior third party coverage from insurer No. 10.

Also, compare Peggy-Ann’s comprehensive vs third-party benefits

Benefit Comprehensive Third Party

• Claim on her policy YES NO

• Manslaughter cover $250,000 $500,000

• Wrecker fees $ 30,000 NO

• Windscreen damage $ 50,000 NO

How was this possible?

• The key is to shop around using the internet – get a quote. The truth is that the prices people pay for the same coverage vary widely and no single insurer can claim to be the low-price leader.

• Increase your deductible from two per cent to 7.5 per cent, which means taking a little more of the risk, is a sure way to save a substantial amount of money.

• Just remember that the increase in deductible also means that you will pay a little more if you have an accident, but you should seriously consider keeping the extra money you saved from shopping around, plus the savings from increasing your deductible. If you have an accident, you have the money. If you don’t, you have extra savings to rock back on.

• Install an anti-theft device.

• Buy through a broker – they have 10 insurers to choose from.

• Insure multiple cars on one policy. You have to buy insurance for the other cars anyhow. If you insure multiple vehicles, apply your NCD to the car with the highest value.

In addition, you can get up to nine months to pay – and no long lines or waiting in an office for hours, since all your transactions are done online.

Email feedback to:mib@cwjamaica.com.