What Your Auto Insurance Policy Does And Does Not Cover?

What Your Auto Insurance Policy Does And Does Not Cover?

Recent social and political turmoil in the country has led to street violence and property damage, leaving many wondering whether their car insurance policy would cover such incidents. In this write-up, we will answer this question and provide information on what a car insurance policy does or does not cover. So, read until the end and leave your feedback or questions in the comments section.

Car Insurance Types in Pakistan: The Least Known Fact

Did you know that there are three types of car insurance policies available in Pakistan, and one of them is mandatory? The general perception is that buying car insurance is optional; however, it is not. Every car owner must at least purchase Third-Party Liability Insurance. Here are the three types of car insurance policies:

  1. Third-Party Liability Insurance: It is mandatory and covers damages caused to a third party by the policyholder. These damages could include property damage and injury or death caused in an accident.
  2. Third-Party Fire and Theft Insurance: As the name suggests, this type of insurance policy covers both the policyholder and a third party in case of damages caused by fire and theft.
  3. Comprehensive Insurance: This is a combination of the above-mentioned insurance policy types wherein the policyholder is covered in case of damages caused by him/her to a third party and damages incurred by the policyholder, such as theft and fire. However, it may also include coverage for other sources of damages like riots, terrorism, earthquakes, floods, and more. It is this type of policy which is the main focus of this blog.

What Your Car’s Comprehensive Insurance Policy Does And Does Not Cover?

The following information must be treated as general information and for informational purposes only, as the specific coverage may differ from company to company.

Loss or Damage (Covered)

An insurance company will indemnify the policyholder against loss or damage to the car and/or its accessories in case of:

  1. Accident
  2. Fire
  3. Theft
  4. Burglary
  5. Riot or Strike
  6. Malicious act
  7. Flood, hail, wind, hurricane, cyclone, tornado, etc
  8. Earthquake, volcanic eruption, etc
  9. Transportation of car by air, rail, road, inland waterway
  10. Terrorism

Speaking of terrorism, the loss of or damage to the property of the policyholder by explosion or otherwise directly caused by an act of terrorism committed by a person or persons acting on behalf of or in connection with an organization is covered. However, it is unknown whether a terrorist act committed by a lone person, not associated with an organization, would be covered or not.

Furthermore, loss or damage caused by terrorism in other forms may also not be covered.

Loss or Damage (Not Covered)

An insurance company may not indemnify the policyholder against loss or damage to the car and/or its accessories in the following cases:

  1. War (declared or undeclared), foreign hostilities, attack, invasion.
  2. Civil war.
  3. Civil/military mutiny, popular uprising, insurrection, rebellion, revolution, military or usurped power.

In conclusion, it can be said with some certainty that loss or damage incurred by your car during the mayhem on days like May 25, 2022, and May 9, 2023, would be covered by your car insurance policy. However, if the same events could be classified as civil war, civil or military disruption of power, popular uprising, insurrection, rebellion, or revolution, then you may be on your own to fix the loss or damage incurred by your car.

If you haven’t bought car insurance, you can use OLX Motors car insurance portal to find out the names of car insurance companies in Pakistan, their plans and price. 

Suggested blogs for you:

Learn Everything About Car Insurance in Pakistan

How to File a Car Insurance Claim

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