Car insurance choices: Comprehensive coverage or three-tier coverage?
Which is better, full coverage or triple coverage?
When purchasing car insurance, everyone faces this dilemma: should they choose comprehensive car insurance (full coverage) which offers more comprehensive protection and is more expensive, or third-party liability insurance (three-insurance) which is cheaper and only covers injury or damage to third parties? Besides the price difference, the coverage of full coverage and three-insurance also differ significantly! This article will analyze the differences in price and coverage between full coverage and three-insurance, as well as the advantages of purchasing full coverage car insurance
Three guarantees VS full guarantee
According to Section 4 of the Motor Insurance (Third Party Risk) Ordinance (Chapter 272), all vehicle owners or drivers are required to purchase third-party liability insurance (3-party insurance) for their vehicles. This is a mandatory basic protection; otherwise, it is illegal. Third-party insurance generally only covers property damage and personal injury to third parties, not injury to the vehicle owner or driver, or damage to their own vehicle. In contrast, purchasing comprehensive motor insurance (full coverage) is voluntary and offers more comprehensive coverage than third-party insurance. Therefore, besides the difference in price, the coverage of comprehensive and third-party motor insurance differs significantly. The following diagram illustrates the differences in coverage between comprehensive and third-party insurance, in addition to their prices:
Advantages of comprehensive car insurance over three-tier insurance
More comprehensive coverage
Compared to third-party liability insurance, comprehensive auto insurance offers more comprehensive and complete coverage. In addition to basic third-party liability coverage, comprehensive auto insurance also provides compensation for repair costs of accidental damage to the insured's vehicle, medical expenses, and may also offer some additional coverage as follows:
Comprehensive insurance allows you to retain your NCD: Comprehensive insurance offers a special protection where you can retain your NCD even after making a claim. As long as the claim amount does not exceed the limit, the NCD will not be deducted. Some comprehensive insurance plans deduct the NCD only after more than one claim. Therefore, if it is only your first accident within the insurance year and the claim amount is not large, such as a minor scratch, you can consider filing a claim first.
A total loss vehicle can be traded in for a brand new one: Most comprehensive insurance policies offer a "new for old" clause, allowing owners to trade in their old vehicle for a new one. If a new car is purchased and an accident results in its total loss within one year, and certain requirements are met, the insured can usually receive a new car of the same brand and model. However, if the vehicle is only partially damaged, the final compensation will be calculated based on the vehicle's depreciation.
Comprehensive insurance covers collisions and thefts while the vehicle is parked: If your vehicle is unfortunately stolen, the deductible is typically between NT$5,000 and NT$10,000, after which the insurance company will reimburse the remaining amount. If your vehicle is hit while parked, or damaged due to momentary lapse in attention, comprehensive insurance will also cover the related losses.
After a traffic accident, you can claim towing and medical expenses: Comprehensive insurance not only covers the vehicle but also the medical expenses of the owner and passengers if injured. According to the provided information, medical reimbursement is usually calculated per policy year and per accident, with a maximum of 5,000 yuan per accident and a maximum of 20,000 yuan per year. If the vehicle needs to be towed to a repair center, comprehensive insurance also provides towing service coverage, typically with a maximum of 2,000 yuan per accident.
If your vehicle is unavailable for repairs, you can still claim compensation for rentinga car: If your vehicle is unfortunately damaged and needs to be repaired, it may take several days or even weeks. In addition to covering the repair costs of the insured vehicle, comprehensive insurance will also reimburse the cost of renting a replacement vehicle during the repair period, usually for 5 to 7 days, ensuring that the insured can continue to use a rental car.
Case studies under different circumstances
When purchasing car insurance, in addition to considering the price of comprehensive coverage and three types of insurance, you can also consider the following situations to make a more detailed plan
Unexpected situation
Even if you are confident in your driving skills and have never had an accident on the road. Some situations you never thought would happen, such as being unable to judge the depth of the water during heavy rain and damaging the engine, or the windshield being shattered by objects falling from a height while parking on the street. The maintenance cost can range from a few thousand yuan to more than 100,000 yuan. You can avoid these monetary losses if you have comprehensive comprehensive vehicle insurance
New driver
For novice drivers, purchasing comprehensive insurance is a better choice. Novice drivers may lack driving experience and face a higher risk of accidents. Comprehensive insurance provides protection for both the driver and their vehicle. Although the premium for comprehensive insurance may be higher, this comprehensive protection offers novice drivers greater peace of mind and security
Owners of high-value vehicles
For owners of high-value vehicles, comprehensive insurance provides all-around protection for luxury cars. Comprehensive vehicle damage insurance protects owners from losses in the event of an accident, while theft insurance provides compensation in the event of theft. Given the high value of luxury cars, comprehensive insurance typically offers larger compensation amounts
Policies of various car insurance companies regarding comprehensive insurance products
Most insurance companies may be unwilling to provide full insurance for private cars that are over ten years old. Some insurance companies even restrict full insurance coverage for vehicles that are over five years old. This is because as the age of a vehicle increases, the potential risks of breakdowns and damage also increase accordingly
Insurance companies typically do not provide coverage for property damage or personal injury caused by driving under the influence of alcohol or drugs. This is because the use of alcohol or drugs severely impairs a driver's judgment and reaction time, increasing the risk of an accident
Insurance companies may charge additional premiums based on factors such as the high risk associated with the vehicle model, its performance, and the policyholder's driving history. For example, high-performance vehicles or vehicles frequently involved in accidents may require higher premiums
If the insured vehicle is used for purposes or activities that are not covered, the insurer will not cover any liabilities arising therefrom. For example, using the vehicle for commercial operations or racing activities may be beyond the scope of the insurance contract
Different insurance companies may have different policies and restrictions. Before purchasing insurance, it is recommended to consult with an insurance agent or broker in detail to understand the specific insurance terms and conditions, so as to ensure that you get the most accurate information and an insurance plan that suits your personal needs
Choose the car insurance that best suits your situation and needs
The two car insurance plans differ in price, coverage, and terms, offering comprehensive coverage with three different benefits. Furthermore, car owners should pay attention to details such as the minimum coverage amount and insurance reimbursement restrictions in the comprehensive coverage plan. Therefore, when purchasing car insurance, you should choose the most suitable plan based on your own circumstances and needs
Comparing different considerations, comprehensive insurance has a higher premium but offers more comprehensive coverage
Besides comparing the prices of comprehensive insurance and three types of coverage, it is essential to thoroughly compare the terms and coverage of different car insurance policies before purchasing. Although comprehensive insurance has a higher premium, it offers broader coverage and can provide more comprehensive protection for car owners or drivers
Comparing prices for comprehensive and triple coverage car insurance while carefully reviewing the different terms and conditions can be troublesome and time-consuming. You can leta car insurance comparisonand quotation platform handle it for you.
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