A motor insurance policy is a mandatory policy issued by an insurance company as part of prevention of public liability to protect the general public from any accident that might take place on the road. The law mandates that every owner of a motor vehicle must have one motor insurance policy.

Broadly, there are two types of motor insurance – the ‘Third Party’ policy and a comprehensive policy. The scope of the ‘Third Party’ policy is to pay compensation for death or any bodily injuries and for damage to property of third parties. While the insured is treated as the first party and the insurance company as the second party, all others would be third parties.

In case the vehicle is purchased under a hire-purchase agreement, the financiers insist upon a comprehensive policy to take care of their interest as collateral security. The perils covered under the comprehensive policy are fire or theft or both fire and theft in combination with the minimum requirements of the act (i.e. third party liability).

Comprehensively, these include damage to the vehicle by accidental external means: fire, lightning, explosion, self-ignition, burglary, house-breaking, riot and strike, malicious acts and terrorist acts, earthquake, flood, inundation, cyclone, landslide/rockslide, etc. while in transit by rail, road, air, inland waterways, lift or elevator.


“When it comes to insurance our company needs a broker that will find the best product that matches our needs and budget, within the current market conditions. Phares does all this and more, making our annual review process that much easier. Their friendly and personal service is second to none, and their skill set and expertise instills confidence that we are getting the best deal.”

Omega Maleko, Pergamon Group Ltd