Most people only focus on insurance premium and sum insured when they buy car insurance. Here is why third-party coverage is what you should examine.When we buy car insurance, we all tend to focus on the sum insured. The sum insured is how much we will get in case of a stolen car or car accident with damages beyond repair. It tells us how much we would have to buy a new car. And that is why we care.
There is another aspect that we should scrutinise more when we buy car insurance: third-party liability property damage coverage.
What is the third-party property damage anyway?
The third-party property damage covers us for the damage we do to another person in an accident where we are at fault. We all believe to be good drivers and that it won’t happen to us. Still, there is a good chance that we will be responsible for a vehicle accident. When this happens, we usually don’t choose which car to hit. The third-party property damage coverage is the only thing protecting us from a large cash payment.
We have seen more and more high-end vehicles on the road over the last few years. Crossing a BMW 5 Series or a Mercedes E-Class is much more common nowadays. Passing the occasional supercar, while not a daily sight, is also more frequent.Crossing and crashing into such a car will have dire consequences if you do not have a proper third-party property damage coverage. These vehicles’ value ranges from 3 million Thai baht to over 10 million Thai baht. If you are responsible for an accident, you are subject to pay for the car repair cost of the automobile. And that is the moment when we wish we had given a closer look at the third-party property coverage section of our car insurance.
Many car insurance plans in Thailand are only covering 1 million Thai baht. Some other insurance plans extend the coverage to 2.5 million Thai baht. Very few car insurance products, like Roojai.com, offer third-party liability coverage of 5 million Thai baht.
The difference between good insurance coverage at 5 million Thai baht and lower insurance coverage at 1 million Thai baht is 4 million Thai baht.This is a much wider difference than what we will see on the sum insured. The difference in the sum insured between car insurance plans is usually a few tens of thousands of Thai baht.
If we have only 1 million Thai baht insurance coverage for third-party property damage, we might barely be able to pay for a dent in that brand-new Mercedes we just hit. For anything more severe, we are in for serious car repair costs in the millions of Thai baht.
The maximum amount your car insurance will pay is the third-party property damage maximum limit that was purchased. If the car repair cost is above that sum, the person we hit will require us to pay for the remaining amount. We are legally liable for that cost, and the failure to pay will take us to court and could lead to bankruptcy.
Why Roojai.com provides 5 million Thai baht third-party property damage insurance coverage.
Roojai.com and KPI decided only to provide 5 million Thai baht third-party property damage insurance coverage. We have concluded that slightly reducing cost was not worth the risk of offering inadequate insurance coverage. We want to protect our customers from the dramatic consequences of a car accident with an expensive car.
Most insurers believe that it is the responsibility of the customer to purchase the correct insurance coverage. Many agents and brokers do not take the time to explain the consequences and prefer to show a lower insurance premium to close the sale.
Insurance is complicated, and it requires time to read all the details. We believe that customers should be free to customise their insurance plan. But we also know that not everybody has the time and interest to understand all the features.
Underinsuring your third-party property damage might have lifetime consequences. At the same time, a lower sum insured may only cost you 20,000 or 30,000 Thai baht.
Our advice is to really focus on the third-party property damage insurance coverage as much as on the sum insured.