What does Third Party, Fire & Theft insurance cover?
In addition to the protection provided by Third Party Only motor insurance, Third Party, Fire and Theft insurance provides indemnity in respect of loss damage to the insured vehicle caused by fire, including self ignition, or by theft or attempted theft whilst within the territorial limits stated in the policy.
The indemnity provided in respect of insured loss or damage to the insured vehicle is the cost of repair or replacement but limited to the market value of the insured vehicle. Where the cost of repair or replacement exceeds the market value of the insured vehicle, the insurer will pay the market value of the insured vehicle in settlement of the claim with the salvage becoming the property of the insurer for their own use or disposal.
The basis of settlement of claims for insured loss or damage to the insured vehicle is indemnity. This means the intention of the policy is put the insured in the same position as they were prior to the insured loss or damage, and settlement of a claim should take into account wear, tear and betterment. Where there is betterment, i.e. the insured is in a better position than prior to the insured loss or damage, the insurer may ask for a contribution to the claim taking into account the amount of betterment involved.
Some Third Party, Fire and Theft motor insurance policies contain a new vehicle replacement cover endorsement extending the indemnity basis of settlement of claims, where the insurer agrees to provide the insured with a new vehicle, if the insured vehicle is not older than a specified age and the vehicle is stolen and not recovered or the cost of repair of the insured loss or damage to the insured vehicle exceeds a specified amount.
An excess is usually applicable to each and every claim in respect of insured damage to the insured vehicle, but there is no excess applicable to third party claims.
In addition to the exclusions contained in Third Party Only motor insurance, Third Party, Fire and Theft motor insurance does not cover any claims in respect of loss or damage to the insured vehicle other than by fire or by theft.
As only loss or damage by fire or by theft is covered, loss or damage through any other cause is not covered, most notably meaning that any other accidental damage or loss or damage arising from an accident is not covered. To insure against the risk of accidental damage to the insured vehicle, Comprehensive motor insurance must be purchased.
Third Party, Fire and Theft motor insurance policies contain specific exclusions or restrictions to cover, such as excluding loss or damage where keys are left in unattended vehicles or loss or damage arising from electrical or mechanical breakdown, but with resultant loss or damage being covered.
Windscreen cover is not included in Third Party, Fire and Theft motor insurance, unless a specific extension of cover is available.
How much is third party fire and theft insurance?
The difference between the cost of a third party fire and theft policy and the cost of a comprehensive product has changed radically over the last few years. at one time the policy would generally cost you about 50% of the cost of a comprehensive contract but with the increased costs attached to motor insurance claims by the dramatic increase in third party injury and accident claims the difference has been eroded significantly. The reason being of course that both levels of cover are picking up these increased losses. In many cases the difference in cost is minimal and some insurers will not offer third party fire and theft policies in certain circumstances.
Who buys Third Party, Fire & Theft insurance?
Third Party, Fire and Theft motor insurance is usually bought where insurance for loss or damage to the insured vehicle is not a priority and the insured believes that at only serious loss or damage is worthy of a claim, or the low priced insurance is required or Comprehensive cover is too expensive.
You can apply on-line for instant on-line quotes from a range of insurers or if you prefer you can call our offices direct to discuss your requirements with on of our specialist motor insurance brokers.