South America is one of the few countries where the law does not require vehicle owners to purchase car insurance. Some drivers rely on the Road Accident Fund, paid for through a fuel levy, to provide compensation for any accident damage they happen to receive. Experts in the industry, however, advise against depending solely on that type of cover.
Lenders require all individuals who finance their vehicle to purchase a comprehensive policy before they take possession of the car. Drivers who own older model cars may not need the full protection offered by comprehensive insurance but they should explore other options. Third party claims can have a devastating effect on someone without sufficient cover.
A comprehensive policy is the most expensive because it covers everything. Limited liability is the least expensive insurance available and offers protection only against claims by others if the insured is at fault for the accident. Individuals with this type of policy are responsible for damage to their own vehicle.
Third party, fire and theft cover falls between comprehensive and limited liability. This type of insurance is a good option if the vehicle is older, paid off and is not worth much. It will pay for a third party claim against the insured in addition to theft and damage caused by fire. Just like with limited liability, drivers must pay for damage to their own car.
Car theft is more common in South America than most people realize. Even older cars are at risk because thieves can make a lot of money selling rare parts. Simply installing a car alarm or some other type of anti-theft device is not enough to deter a determined car thief.
Some people may mistakenly believe that fire cover is a waste of money. This may be true if the car is new but older cars frequently have electrical problems and are prone to overheating. Both problems can cause a fire, which is capable of destroying the vehicle within a matter of minutes.
When searching for a suitable policy consumers should shop around to ensure they receive the most cover for the best price. Many companies make it simple for drivers to receive auto insurance quotes online. It is worth the effort to request quotes from several companies and compare premiums and benefits. Individuals who need more information can speak to a qualified agent to review the various options available to them.