Buying car insurance can be difficult, especially if you’re not familiar with insurance policies. You may be wondering whether you should choose first party vs third party insurance for your car protection. Many people opt for third party insurance because it usually has a lower premium and is more cost-effective.
First Party vs Third Party Insurance: Which One Should You Choose for Your Car?
Fundamentally, first party insurance (Comprehensive car insurance) can be considered one of the best financial investments for you. Although comprehensive insurance coverage may have a slightly higher cost, it is definitely worth it due to the protection it provides.
However, not all cars or car owners require this first party insurance coverage. It entirely depends on specific circumstances and situations. If you want to determine whether your car requires a first party vs third party insurance policy, follow this article to find out more.
1. If Your Car Is Under 5 Years Old
Apart from a house, purchasing a car is considered one of the most expensive purchases you may make. Therefore, it is important to protect this asset with comprehensive insurance coverage for thorough protection.
If your car is under five years old, between first party vs third party it is recommended to get a first party insurance policy. Basically, comprehensive car insurance will provide you peace of mind. This is because you are aware that your car is protected from any risks such as:
2. If You Cannot Afford Repair Costs
Fundamentally, every individual knows their financial capability and monthly commitments. Suppose an unfortunate event such as an accident occurs. Can you afford the repair costs or hospital treatment without relying on insurance assistance?
If your answer is no, then you need to consider a first party insurance policy for your car protection. Imagine being involved in an accident (your own fault) without having first party insurance. You might need to dip into your savings or funds like ASB or Tabung Haji to repair the car damage.
Car repair costs can be quite expensive, ranging from thousands of Ringgit depending on the type of car damage. With comprehensive car insurance, you can file an insurance claim when an accident occurs, and the insurance company will cover the repair costs for your car.
3. If You Have a Bank Loan
If you obtained a bank loan for purchasing your car, it is advisable to get first party insurance. If your car gets stolen, catches fire, or is involved in an accident, it will be protected by insurance.
Suppose you buy third party insurance coverage and an accident happens. You will not only face the repair costs for the damaged car but also be stuck with monthly loan repayments to the bank.
With a first party insurance policy, the insurance company will cover a significant portion of the repair costs if the insurance claim is successful. However, if you cannot afford comprehensive car insurance, you can consider at least third party, fire, and theft insurance.
What Are Comprehensive, Third Party, and Third Party, Fire, and Theft Car Insurance?
These three types of car insurance offer specific protections. You can choose any insurance policy that suits your needs.
Third Party Insurance (Third Party Car Insurance):
This policy offers protection for third-party claims ONLY. It protects third parties from injury, death, damage, or loss to their property caused by your car. It CANNOT be used for claims related to damage to your own vehicle.
Third Party, Fire, and Theft Car Insurance:
This policy offers the SAME protection as third party insurance. It includes additional coverage that protects your vehicle in case of damage due to theft or accidental fire.
First Party Insurance (Comprehensive Car Insurance):
Comprehensive car insurance offers the SAME protection as third party insurance and third party, fire, and theft insurance. However, it provides more extensive coverage, not limited to third-party vehicles but also covers your own vehicle.
4. If Your Car Is Driven by Multiple Drivers
As a vehicle owner, you surely take all precautions while using your car. You park it in safe areas, drive within speed limits, and avoid reckless driving to minimize unwanted risks.
However, if you often lend your car to your siblings or other family members, and you’re not familiar with their driving habits, it’s best to get comprehensive car insurance coverage. This way, you don’t have to worry about repair costs if the car gets damaged while under the care of another driver.
To maximize protection, you can add other drivers to your policy. The first two names (policyholder and one additional driver) are free of charge. Any additional drivers (third driver and beyond) will incur a fee of RM10 each.
5. If You Want to Enjoy More Savings
When you renew your car insurance, especially third party insurance, you can enjoy various additional and complimentary benefits. This undoubtedly helps you save more money. For example, most first party insurance plans usually offer additional benefits such as:
- Free towing service;
- Roadside assistance (flat tire change or battery replacement);
- Warranty for repair work, and more.
These additional benefits provide a more inclusive experience and protection. However, the specific additional benefits offered may vary depending on the insurance company’s policies. It is recommended to review them before making a decision.
Renew First Party Insurance for Your Car with Qoala for Optimal Protection
We hope this information helps you choose the best car insurance for your vehicle. Whether it’s first party vs third party insurance, both are essential for your car’s protection. Consider all possibilities before making a decision to ensure you get the appropriate coverage.
Additionally, if you want to obtain first party insurance coverage for your car, visit the Qoala website for more information. Qoala is the most comprehensive and best online insurance comparison platform in Malaysia.