The most popular reason why people buy auto insurance is the coverage against accidental damage and third party liabilities. However, information related to car insurance in Pakistan remains scattered and outdated despite being a fast growing phenomenon in the country, leaving many scraping for answers. Many still are not convinced of the benefits of auto insurance.
It is important to understand the reasons to have such insurance and types of policies associated with it. We are here with everything you need to know about it. At the end, you will also get some important tips.
Why do you need car insurance in Pakistan?
Getting insurance is as important as buying a car in Pakistan. Reasons behind this might differ from person to person. But the common reasons are as follows.
- To abide by the law
It is not necessary to have full car protection in Pakistan. However, some laws make it necessary for car owners to have third party liability insurance that is helpful in the case of an accident.
- Financial protection
Financial protection is among the major reasons why having car insurance is beneficial in Pakistan. We all know about the traffic situation here. No one is completely safe on the roads. Financial protection gets you covered in difficult situations like accidents.
- Cover your cost of repairs and parts
In the case of damage caused by an accident, the cost of repair and parts can become a headache. However, this is not the case with the people that have car insurance as the company covers these costs as per their policy.
- Protection against car theft
Car theft is common. To help save your investment, consider getting your car insured.
Types of car insurance policies in Pakistan
There are three major types of car policies in Pakistan. Here are all three of them in detail.
- Comprehensive car insurance
- Third-party liability car insurance
- Collision car insurance
1) Comprehensive Car Insurance
As the name suggests, this type of car insurance covers all the major elements such as accidents, theft, flood, third party liability, and fire.
2) Third-party liability car insurance
In this policy, the company covers damages done to others (third party) due to your mistake / fault. It only covers damages to the others, not of those done to your vehicle.
3) Collision car insurance
This type of coverage helps pay to repair or replace your car if it’s damaged in an accident with another vehicle or object.
Benefits of car insurance
What benefits can you get by getting car insurance in Pakistan? These are some of the most important ones.
- Financial protection
- Protection against natural disasters like floods, fire, etc
- Car theft
- Peace of mind
What to consider when buying car insurance in Pakistan? Tips from experts
- Select the right policy type
- Don’t raise claim for small or minor damages to get No-Claim Bonus
- Compare all the policies available
- Keep your deductibles (amount to be paid for accidental damages) high
How to select the right company?
Follow these tips before selecting the right car insurance company.
- Compare the policy rates of different companies
- Analyze the benefits
- Look for limitations of each company
- Seek discounts
- See the reputation of company (history, time and procedure for releasing funds)
Price and benefit comparison of different car insurance policies
While there are many car insurance companies, we are here with the comparison of Adamjee car insurance, Jubilee car insurance, and TPL car insurance to help you understand their rates and benefits. Here we are comparing the rates and benefits for comprehensive car insurance for Honda City 1.5L ASPIRE (2022).
|Jubilee (private car comprehensive)||Adamjee (motor comprehensive)||TPL (comprehensive)|
|Rate: 2.25%||Rate: 2.25%||Rate: 2%|
|Rs.12634 / month||Rs. 12634 / month||Rs. 11230 / month|
|Accident Damages||Accident Damages||Accident Damages|
|Total Loss||Total Loss||Total Loss|
|Natural Calamities||Natural Calamities||Natural Calamities|
|Riots & Strike||Riots & Strike||Riots & Strike|
|Deductible (No)||Deductible (No)||Deductible (No)|
|No Claim Discount (No)||No Claim Discount (No)||No Claim Discount (Yes)|
|Third Party Coverage||Third Party Coverage||Third Party Coverage|
|Death Bodily Injury (No)||Death Bodily Injury (No)||Death Bodily Injury (No)|
|Property damages||Property damages||Property damages|
|Emergency Medical Expenses||Emergency Medical Expenses||Emergency Medical Expenses|
|Value Added Features||Value Added Features||Value Added Features|
|Call Center support||Call Center support||Call Center support|
|In-house surveyors||In-house surveyors||In-house surveyors|
|Replacement at Door step (No)||Replacement at Door step (No)||Replacement at Door step (No)|
|Mobile App (No)||Mobile App (No)||Mobile App (Yes)|
|Self Assessment at approved dealership (No)||Self Assessment at approved dealership (No)||Self Assessment at approved dealership (Yes)|
Some important questions and their answers about car insurance in Pakistan
Here are the answers to some important questions.
Which elements play a vital role in calculating the price / premium of insurance?
- Total value of your car
- Make and model
- Parking and usage areas
- Driving history
- Year of manufacturing
- With or without tracker
- Insurance estimated amount
Does the policy provide coverage when both husband and wife drive the same car?
Well, the coverage is for cars and not for people. So, that’s not a problem. However, you will have to disclose the details of people from your household who will be driving the car to the insurance company.
Do companies provide nationwide coverage?
It depends on the company and your requirements. Some companies don’t provide nationwide service due to different reasons. However, you can ask for it and they might charge some extra amount for this purpose.
Are there any special requirements to insure a car for rental business?
The insurance policy can be purchased in the name of the actual owner or in the name of a car rental company.
Things to remember
The best car insurance companies in Pakistan will charge you around 2-3% premium rate. Depreciation charges are also deducted where applicable, especially in the case of parts replacement. These charges vary depending upon how old the car is.
When applying for insurance, these are the documents you need to have.
- Latest photos of the vehicle
- Vehicle registration documents
- Other documents required by the company
We hope you found this information useful. Let us know if the information you have been looking for is covered in this document. Should you have any questions, feel free to ask in the comment section below.
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