One of the types of car insurance policies available in the market today is third-party, fire, and theft, also known as (TPFT). Though this policy sounds similar to third-party insurance, it is a different vehicle coverage plan that offers added protection for a slightly higher premium.
But how does a TPFT policy differ from other types of insurance policies? What sort of protection does it offer for policyholders, and what are its exclusions? Read on as we explain the policy in detail by addressing some questions from people.
Third-party, fire and theft insurance
A third-party, fire and theft insurance is a ‘semi-complete’ coverage for vehicle owners compared to a third-party plan. We say this because, unlike a third-party policy, which doesn’t cover damages resulting from fire and theft, this plan protects policyholders and their named drivers against fire and theft.
However, it does not cover vehicle impairment due to self-inflicted accidents. Simply put, if you, as the policyholder, caused an accident and your car is damaged, you will not be eligible to seek compensation from your insurer under a TPFT policy. Instead, the repair cost must be self-borne as the policy does not cover it. However, if the accident involves damages to a third party, a claim can be filed, as it is a covered event.
What can be claimed?
The following are the incidents that qualify for insurance claims under a third-party, fire and theft policy:
- Vehicle theft
- Vehicle fire due to treachery or accident
- Claims from third parties for property loss, injury and death
As a semi-complete insurance plan, third-party, fire and theft policies exclude claims for the following incidents, as they are not included in the policy:
- Vehicle damage due to self-inflicted accidents
- Car windshield damage/cracks
- Damage due to convulsions of nature
- Car damage from hitting an animal
- FREE towing for accidents or breakdowns
- FREE roadside assistance after an accident
How much is the premium?
The premium for any insurance policy is different every year. As such, the annual premium for TPFT policies varies yearly and across insurance companies. Nonetheless, it can be said that TPFT policies cost less and are cheaper than comprehensive policies.
Insurance providers usually evaluate several factors before setting the final premium for this coverage. This includes but is not limited to the following:
- Current year NCD
- Location – The place of residence that tells about the general safety of your area
- Driving habits – Your driving history and risk-assessment profile to determine if you’re a high-risk driver
- Claims records – Your claims history demonstrating how frequently you have filed for claims
Is TPFT policy worth considering?
There’s no doubt that a first-party policy is your best bet when purchasing auto insurance. It provides the most comprehensive protection for your vehicle and various complimentary benefits, such as free towing, 24-hour roadside assistance, and emergency jump-start, to name a few.
However, not all vehicle owners can afford this package due to budget constraints. In this case, TPFT coverage, which is the closest match to comprehensive insurance, can be considered since it covers liabilities to third parties as well as fire and theft protection.
Besides, a TPFT policy is also recommended if you own a car older than 10 years and no longer qualify for first-party insurance. Note that it is common for insurers to offer first-party policies for vehicles below 10 years old since they are less susceptible to breakdowns compared to their older counterparts.
Hence, it is necessary to consider your specific situation before deciding whether this policy is right for you.
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