Car Insurance in Karachi: Understanding Comprehensive vs Third Party Coverage

What is motor or car insurance? Car insurance is a type of insurance that helps protect you and your vehicle in the event of an accident, theft, or other unexpected event. It can help cover the cost of damages to your car, as well as any medical expenses that may arise as a result of the accident. In addition to providing financial protection, car insurance can also give you peace of mind knowing that you have a safety net in case of an emergency. Some car insurance policies also offer additional benefits, such as roadside assistance and rental car coverage. Overall, car insurance is an important investment for anyone who owns a car and wants to be prepared for the unexpected.

If you’re considering car insurance in Karachi, this article will provide you with all the necessary information to make an informed decision. In Pakistan, car insurance is not always widely purchased due to a lack of awareness about the insurance industry in the automobile sector or a lack of convenience. You might be surprised to learn that it is required by law in Pakistan to have your car insured, in case you cause damage to another person’s vehicle or injury to the person while driving. It is mandatory to have some form of insurance, whether it is comprehensive or third party insurance, because it is the law. However, the government lacks in enforcing this law.

Before going further, we will first discuss the difference between comprehensive and third party insurance and which is best for you.

Third Party insurance

As the name of this insurance indicates, it is insurance for a third party. For example, if you hit someone while driving and break the windshield of their car, your third party insurance will cover the damage caused to their car. However, damage to your own car as a result of this unpleasant event will not be covered by the insurance. Third party insurance is helpful in cases where you hit someone and the cost to repair other vehicles is high, as it can help to mitigate the loss of others and allow you to repair your own car.

Comprehensive Insurance.

Contrary to third party insurance, comprehensive insurance is complete insurance that covers loss to both third parties and your personal loss. In Pakistan, if an accident happens, a blame game often starts immediately and no one wants to admit their mistake. Most of the time, the wrong party is blamed for the accident. Having comprehensive insurance in Pakistan can give you peace of mind because, irrespective of fault, this insurance will cover the losses incurred by all parties involved in the accident. There is a price difference between comprehensive and third party insurance, which reflects the coverage provided in case of car accidents. More coverage means more protection and a higher price

Now, you are in a position to choose which insurance package is suitable for your needs.

In Pakistan, there is a cultural phenomenon where we usually insure our new cars but old cars are left out of the equation. It’s like when we buy a new smartphone, we always purchase screen protectors and back covers, but for old or second-hand phones, our approach is different and we don’t care as much as we do for brand new smartphones. The same is true for automobiles. When we buy new cars, we are more likely to insure them compared to old cars. However, loss is loss, whether it happens to your old car or new one. There is an equal chance of your car getting into an accident, God forbid, no matter if it is a zero-meter car or already driven. So, you might be wondering if insurance is available for used cars. The answer is YES. There are insurance companies in Karachi that provide subscriptions for used cars.

Tips for Choosing the Best Car Insurance in Karachi

You should buy insurance for your car from a car insurance company that has a regional presence in Karachi. To find one, you can search online and you’ll definitely find insurance companies located in Karachi. If you are buying it for your new car, it’s likely that the car dealership already has 3 to 4 of the best insurance providers for you to choose from at the time of purchasing your new car. In the case of a used car, you can go with an online option or visit their offices to select which one is best for you. Make sure to select 3 to 4 insurance companies and then compare their premiums and the coverage they provide, weighing their pros and cons. You should also consider the claim rate - if the claim rate is low, you should avoid it, no matter if the premium is suitable for you. While selecting insurance, be mindful about the coverage you need for your car. For example, in Karachi, you should consider car theft coverage because the security situation in Karachi is not good. Choose a company with a regional presence in Karachi. It’s important to work with a car insurance company that has a physical location in the city, as this will make it easier for you to access their services and resolve any issues that may arise

Five things to consider while buying car insurance:

1. Your insurance agent will only provide information about the policies of the company they work for. So you should consider the policies of other companies that might be beneficial to you. Make sure to create a comparison list of different insurance policies from different companies to make a smart choice.
2. Check whether your insurance provider will refund you upon cancellation of the insurance policy.
3. Insurance agents work on commission, so they will try to sell you policies with high premiums that might not be the right policy for you.
4. Find out what is not covered in your policy, such as wear and tear of vehicles or radiator repair.
5. Find out how much the premium will increase with the age of your car.
6. Consider additional benefits. Some car insurance policies offer additional benefits such as roadside assistance and rental car coverage. These can be helpful to have in case of an emergency

How to claim car insurance in case of accidents

Claiming insurance in case of accidents can be a headache. If you have leased your car from a bank and you have an accident, the bank will have insured the car and you should ask them for the insurance certificate and contact details of the insurance provider. If you have manually insured your own car, you can check the insurance certificate provided to you by the insurance company, which will contain contact details. You should immediately contact your insurance provider about your car accident and explain the details to them, including the time and place of the accident. Your insurance provider will ask for photos of the damaged vehicle and then do a risk assessment, telling you to wait. People often make the mistake of taking their car to a workshop and starting repairs without the consent of the insurance provider.

After some time, a surveyor will contact you and ask for details about the car. They will then ask you to take it to a specific showroom at a provided time for a physical assessment. Make sure to take the insurance certificate and insurance policy statement with you. After that, they will decide on the course of action, such as whether to replace or repair the damaged part of the car. If you want to repair the part, it will be covered by the insurance and you do not have to pay a single penny. However, if you choose to replace the damaged part with a new one, you should bear in mind that you will have to pay a depreciation amount, which is 12 percent and depends on the age of your car. For example, if the cost of the part is 100 rupees, you will have to pay 12 rupees and the rest, 88 rupees, will be provided by the insurance provider for the first year. For the second year, you will have to pay 24 rupees, and for the third year, 48 rupees, and so on. After the maintenance of your car, you will be provided with a satisfaction note. Make sure to sign it if you are satisfied with the maintenance of your vehicle. If you are unsatisfied, make sure not to sign it. They will redo the maintenance work according to your expectations. When you are satisfied, the case will be closed.

Top 5 Car Insurance Companies in Karachi

1. Adamjee Insurance, in partnership with Pak Suzuki, offers an online policy issuance service called Suzuki Insurance in Pakistan. The retail insurance department at Adamjee also provides insurance and vehicle tracking packages to customers purchasing new vehicles from authorized dealerships in the Toyota and Honda markets, as well as similar services to used car customers through a 24/7 call center. Adamjee’s insurance offerings include a range of coverages such as theft, accidental damage, and third-party liability, as well as value-added services like online policy issuance and SMS reminders. Customers can contact Adamjee’s call center at 0800-00242 or email info@adamjeeinsurance.com for more information.

2. Smartchoice is a platform in Pakistan that aims to increase the penetration of insurance by empowering consumers to make informed decisions and offering a convenient customer experience. The company was founded in 2015 and has since expanded to offer comparison services for broadband, banking, and insurance products. Smartchoice has partnerships with top-rated insurance companies and collects data directly from them to ensure accuracy. All information and advice on the platform is free of charge and the company values transparency and convenience for its customers. Since its launch, Smartchoice has insured over 25,000 lives, received over 200 positive reviews, booked over 1 billion in premiums, and made over 3 million comparisons. The company has also received recognition from organizations such as Nest I/O, P@sha, and Islamabad United.

3. TPL Insurance is a direct insurance company in Pakistan that offers a range of general insurance products, including conventional and Islamic insurance options, through its 24/7 call center and mobile app. The company aims to provide convenient and efficient service, with a promise to process claims in less than 60 minutes. TPL Insurance’s Auto Direct product allows customers to choose from various insurance options tailored to their vehicle make and model, including comprehensive coverage, 2T protection, and Secure T coverage for older cars. The company also offers DrivePro, a telematics-based insurance product that allows users to track their driving score and data, and Platinum Drive, a comprehensive auto insurance package with additional value-added provisions. Other TPL Insurance products include comprehensive coverage with zero depreciation, a “buy now, pay later” option, and value-added provisions such as Kar4Kar, which covers the cost of replacing a stolen or totaled car with a new one, and Personal Accident coverage for hospital expenses.

4. Jubilee General Insurance is a Pakistan-based company that has been in operation for over sixty years. It is one of the largest insurers in the country and is listed on the Pakistan Stock Exchange. The company’s major shareholders include Aga Khan Hospital and Medical College Foundation, Habib Bank, Aga Khan Fund for Economic Development, and Hashoo Group. Jubilee General has a strong financial base and has been assigned an insurer financial strength rating of AA++ and a stable outlook by VIS and PACRA. It has also been given a financial strength rating of B+ (good) and an issuer credit rating of bbb- (good) by A.M. Best. The company has a wide range of services and clients, including national and multinational corporations in various sectors, and offers coverage for various classes of general insurance including fire, marine, motor, engineering, health, and general accident. Jubilee General also provides risk management services and insurance solutions for consumer finance.

5. AGICO is a car insurance company in Pakistan that offers general takaful insurance for private and commercial vehicles, as well as motorcycles. The company offers customized and flexible plans with 24/7 customer support and the option for cashless transactions at garages across the Pakistan. Private comprehensive car insurance covers loss or damage to the insured vehicle due to accidents, theft, fire, terrorism, and natural disasters, as well as third party liability for property damage and bodily injury. The policy can also include personal accident coverage for the driver and passengers. The premium for commercial car insurance depends on factors such as the type and age of the vehicle, the fuel type, and the area in which it is used. The policy does not cover general aging and wear and tear, damage caused by unlicensed drivers, mechanical or electrical failures, or loss or damage outside Pakistan.