Auto Insurance is mandated by law under the Motor Vehicles Act of Pakistan. However, despite this Pakistanis tend to ignore this law when it comes to our vehicles. At the bare minimum, we are required to at least have third party cover before the vehicle is permitted to be on the road. For those of our readers who don’t know what third party cover is? A third party cover insures you from having to bear any costs in case you are at fault. Since causing an accident which is your fault can result in loss of public or private property, third party insurance ensures you are able to cover the loss you caused.
A lot of us tend to be apathetic when it comes to motor insurance. The reality is that such financial products really do help manage our risks. Think about it, our traffic and security is precarious which puts us at inherent risks of road accidents, theft, etc. Vehicles cost us a lot in Pakistan, therefore we should be insuring them. Why we don’t is the million dollar question.
When looking for auto insurance, always get a comprehensive motor insurance policy. A comprehensive policy helps you cover your risk of accident, theft, damage to vehicle due to weather conditions, earthquakes, acts of God, or when being transported from one city to another (within the country) while also covering you from any third party risks.
If you are in the market looking for auto insurance, be sure to ask the following questions before you decide to buy.
- What is the rating of the Insurance Company? This tells you their credibility and their capacity to honor your claim. Better rated insurance companies will charge you a higher premium, simply because of their rating.
- What is the Premium being charged? This is a no brainer, but do not make a decision solely on price alone. Also consider what kind of repair network/partners an insurance company has, how quickly they will service your claim. These are just a couple of points to factor in before making your decision.
- What is the depreciation they will charge? This is the maximum amount the insurance company covers on replacement of spare parts in the event of an accident. For instance, after an accident you need the bumper, fender, and radiator replaced for your 3 year old car. The insurance company will apply a charge of say 10% on the age of your car. In the example the company will only cover 70% of the cost of spare parts, the remaining 30% will need to be covered by you.
- Is there any hospitalization cover for those involved in an accident? What if someone ends up in the hospital due to the accident, will the insurance company cover the cost? What is the additional premium they will charge for this ‘add on’ or is it already included?
- Does the policy cover my salaried driver? Since a lot of people have drivers operating their vehicles for them, in the event that the driver is involved in an accident will the insurance company cover their hospitalization costs? Or is only the owner covered?
- What is the premium rate with a tracker vs without? Some cars won’t be insured without a tracker at all. For instance very few insurance companies will insure Toyota Corolla’s or Suzuki Mehran’s without tracker. They either ask you to arrange it yourself or do it through them. In the event you have it done through the insurance company you need to ask what the impact on your premium payment is.
Getting auto insurance is unarguable. You should protect yourself, your asset, your loved ones and other people’s property. It is the responsible thing to do.
Here are the main reasons to get auto insurance:
- It is illegal to drive without at least minimum basic auto insurance. If you were in a foreign country you would be following the rules, so why not also follow them in your own homeland 🙂
- Accidents can happen anytime – would you rather argue with someone on the street to cover your damage or just have your insurance company take care it from a renowned workshop.
- If your car gets stolen, you can be rest assured you will be able to recover your money to buy another vehicle.
- It allows you comfort and peace of mind.
Soon Pakistani consumers will be able to compare and buy auto insurance from our platform in the very near future. Keep an eye on us. We are here to help you make more informed decisions.