Understanding comprehensive insurance

UNDERSTANDING “COMPREHENSIVE” MOTOR INSURANCE (by Sharon Lans) 

Do you have “comprehensive”  insurance or “full comprehensive” insurance? That’s a trick question. The term “full comprehensive” is no longer in the vocabulary of current insurance practitioners. 

Apparently the term “full comprehensive” was widely used up to the great Diego Martin flood of 1962. At that time, flood was not a peril covered by motor policies causing great dissatisfaction among customers who had purchased “full comprehensive” motor policies.  The insurance agents representing the foreign companies then operating in Trinidad, decided that the term “full comprehensive” was misleading, agreed to immediately stop using the term and actively taught newcomers to the industry not to use the term. 

However more than fifty years later, the term “full comprehensive” persists in the public domain as evidenced by its wide use throughout Hansard, in at least one piece of modern legislation and by motorists. 

In motor insurance, “comprehensive” means that a car owner has purchased cover for accidental damage or theft of his own vehicle, whether or not he was wrong in an accident, as well as cover for accidental injury or property damage to other persons (third parties).  Most comprehensive policies also cover accidental damage caused during riots or by malicious persons. Only some insurers include cover for damage caused by hurricane, earthquake and flood in their standard policies, others charge an additional premium while a few do not provide the cover at all.  Other than reading your policy thoroughly, there’s no way of knowing whether you are covered for all the perils. 

Just because you have “comprehensive” cover does not mean that anybody can drive your vehicle. All insurers have restrictions for new drivers – typically persons with under two years driving experience,  and young drivers – typically persons under 25. If you have a “named driver” policy, the only persons who are covered by the policy are named on the certificate of insurance – whether or not you have “comprehensive” insurance. If someone not named on the certificate drives your vehicle and causes an accident, there is no insurance cover for your vehicle or the innocent victim. And if you – the owner – permit someone to drive your vehicle without insurance, then you are liable. 

So is comprehensive cover worth the additional cost? Now, more than ever, since “hit-and-run” collisions are increasing along with the numbers of cars.   Enhancements under some comprehensive policies provide cover that is not even related to collisions, such as road side assistance (a necessity if you have to change a tyre on an SUV or if you lock your key in your car) and hospitalization costs. 

So, comprehensive insurance cover or not, check your policy (or your broker) to see the perils for which your vehicle is covered, and do not allow new drivers or persons under 25 to drive unless you have informed the insurer (and paid the additional premium).  

For more information on motor insurance cover in Trinidad and Tobago, follow this link;

 http://www.ofso.org.tt/wp-content/uploads/2013/08/In-the-Drivers-Seat.pdf