car news

3 reasons to choose to insure your car ‘only’ TPL

July 19, 2023

If you own a car that you want to be able to drive on the road, you are required to have insurance for it. So insuring your car is not optional. However, how you insure your car is a free choice. There are different levels of coverage: Third Party Liability (TPL), Limited Comprehensive and Fully Comprehensive (All-risk). WA is the lightest coverage. This insures you only for the damage you cause to another person’s car, but not for damage to your own car. The question is: why choose such “light” coverage? We discuss three reasons for choosing to insure your car “only” TPL.

Not paying more than required by law

Consideration of cost is an important reason for choosing only third-party insurance for your car. This is how you save on fixed expenses. The difference in monthly costs with heavier coverages can be quite large, so it is often well worth making this choice from financial considerations. At the same time, you then fulfill your legal obligations, because you are insured for the damage you cause to another person, so you are allowed to drive your car on the road. That’s how you achieve that goal with the lowest possible monthly cost. But, of course, you are also taking on a risk because your car is not insured for damage and theft. Therefore, if that happens to you, the financial consequences are at your own risk.

Car with low daily value

Do you have an older car that has little value left? So then the car has a low daily value, so to speak. This is relevant to choosing your car insurance, as it is a reason to choose third-party insurance. After all, your insurance will only reimburse damage up to the car’s daily value. Thus, with a low daily value, the maximum compensation in case of serious damage and theft is also only low. You might wonder if it makes sense then to pay a high monthly premium for heavier coverage knowing that you won’t get that much more from your insurer anyway if your car is stolen or suffers serious damage. Because of the low daily value, your car will be declared totaled relatively quickly because the repair costs no longer outweigh the value of the car.

Low risk of damage

It’s still a risk you take when you only have third-party insurance on your car, because of course, anything can happen to your car in public places. Not only in traffic, but also when parked. However, you may only drive your car infrequently and usually have it locked in the garage at home. If you want to drive it only occasionally and therefore still have to compulsorily insure the car, going for third-party car insurance is an understandable choice. After all, the risk of damage is a lot lower if you don’t take to the road much and can store your car safely.

However, most of us take a car to drive it regularly, and then the argument of low risk of damage does not hold water. In that case, the daily value of the car is an important argument in choosing the right car insurance for you. Don’t spend unnecessary money on monthly insurance premiums if you can only expect a low reimbursement from your insurer anyway, because that’s a waste of money. That money is then better set aside to build a buffer in advance in case you need to replace your current car because it is no longer worth repairing or is stolen.