Insurance for many is Motor Insurance. Ever wondered why this is the only known insurance to most folks?! There is a valid reason. Let’s get started.
Our law in Ghana, Motor vehicles (Third party Insurance) Act 1958 makes it mandatory for users of vehicles plying on roads to have insurance or security in place. Motor insurance is evidenced by a certificate of insurance and a sticker; which should be made available upon inspection by the security enforcement agency (police).
There are 3 main types of motor insurance: 1.Third party 2. Third Party Fire and Theft, and 3. Comprehensive.
Third Party Policy
This covers only third party liabilities. In our day-to-day interactions we can resonate better the meaning of a third party: someone not a party to the original contract. This policy is simply done for the benefit of other road users: passengers, pedestrians and other property owners. The policy only pays out when the insured’s vehicle causes damage to another person (s) property or causes injury (or death) to another.
Third Party Fire and Theft
In addition to the above contingencies, this policy provides relief to the insured party when fire guts his vehicle or thieves make away with any part or the whole vehicle.
This is also known in other jurisdictions as full coverage. It covers all accidental or malicious damage to the vehicle in addition to the contingencies of a Third Party Policy. Thus flood risk, collision, theft, etc are all covered. Standard exclusions include Deductible (the amount borne by the insured in the event of a loss), mechanical damage, electrical damage, tyre blow-out and loss of use.
First part of motor insurance 101 done. Let’s focus now on premium computations.
Third party premiums are usually obtained from an industry established tariffs. They are amended periodically.
Third Party Fire and Theft is derived by adding the tariff premium with a usually base rate of 0.25% – 2% of the sum insured of the vehicle.
Comprehensive is usually rated on the sum insured plus the third party premium. Usual rate ranges between 3 to 8%. Motor insurance premiums vary with respect to every risk and subject to the judgment of the insurance underwriter. Usual considerations include the make of the vehicle, usage, year of manufacture, cubic capacity, occupation of the driver, driving experience and claims history.
In the event of a claim, documents needed to make a claim includes a police report, estimates of repairs, driving license, pictures of damaged vehicle, completed claim form, etc.
You can send me a mail for extended interaction on insurance. Thank you.
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