If you intend to use a car, motorbike, moped or other motor vehicle on public roads you are legally obliged have third party insurance. This will pay for any damage you may cause to others while using your vehicle. In this way, the law ensures that victims are not left high and dry. The term ‘victim’ is subject to a wide interpretation, i.e. ranging from the other party to the passengers in the vehicle that has caused the accident.
In fact, only the person responsible for the accident is not compensated. In most cases this will be the driver. It is, therefore advisable, to take out personal accident insurance in addition to the obligatory insurance, so that you (as the driver) receive compensation in the event of personal injury.
Motor insurance provides third party cover for the driver of the vehicle and also covers the liability of any passengers in the vehicle. There is only one exception to this; if your car is stolen your motor insurance will not provide third party cover for the thief. In fact, motor insurance policies provide very extensive cover.
In some situations, however, the insurer has the right to reclaim some of the money it has paid out to victims from the insured party (for example, if the insured was drunk or did not have a valid driving licence at the time of the accident).
If you are involved in an accident and you are to blame, your third party insurance will compensate the other party. But what about your own car? You will have to pay for the damage yourself, unless you have comprehensive cover. However, in the unlikely event that you are distracted and end up in a ditch or crash into your own garage door, your comprehensive insurance will also cover the damage to your own car. The same applies if someone else is driving your car and causes an accident that damages your car.
Your insurer will pay for the damage to your car and will not reclaim it from the other driver. The latter will, however, have to pay the excess, that always applies to fully comprehensive insurance. The excess is a previously arranged amount, which the insured party will have to pay at all times. It has a dual purpose, i.e. to encourage the insured party to drive carefully and to ensure that the premium is contained.