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Motor insurance: The right coverage for you and your car

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There are three different types of car insurance: Third party liability, fully comprehensive and partial comprehensive. One of them is mandatory, the other two are not. In this article we show which insurance you really need.

What are the benefits of car insurance?

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Have you damaged your neighbor's Porsche while reversing into a parking space and, annoyingly, demolished your own bumper in the process? Then your car insurance will step in, which is divided into two types. Third-party liability covers the damage to the Porsche, while comprehensive insurance covers the damage to your own bumper. There is one important difference between these two types of insurance: Motor liability is required by law in the US. In order to register the vehicle, proof of such insurance must be provided. With comprehensive insurance, on the other hand, you have a choice: taking out this insurance is voluntary, but it is usually in your own interest.

Motor vehicle liability for damage to strangers

Liability insurance steps in if you cause personal injury or property damage in a car accident and the injured party now claims compensation. Personal injuries in particular can quickly exceed your financial limits: If hospital bills and rehabilitation measures have to be paid, sums in the higher, four- to five-figure range are incurred in no time at all. In this respect, compulsory liability insurance not only protects the victims of an accident, who would get into trouble themselves if the person who caused the accident is unable to pay. Motor liability insurance also protects the person who caused the accident from financial ruin.

Benefits of motor liability insurance

Motor vehicle liability insurance covers the consequential costs of any damage you cause to other road users as a result of a traffic accident you cause. This includes personal injury, property damage and financial losses. However, there is another important function: motor vehicle liability insurance also defends you against unjustified claims for damages on your behalf.

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Coverage amounts of motor vehicle liability insurance

For motor vehicle liability insurance, the minimum coverage amounts are prescribed by law: 2.5 million euros for bodily injury, up to 7.5 million euros for death or injury to three or more persons, and 1.12 million euros for property damage and 50,000 euros for financial loss.

Comprehensive insurance for own damage

In contrast to motor vehicle liability, comprehensive insurance is a voluntary supplementary insurance. It covers damage to your own vehicle. A further distinction is made between fully and partially comprehensive insurance. The partial casco covers damage to the car caused by external influences. The fully comprehensive insurance also covers this, but in addition to this, it also covers damage to your own car caused by your own fault. Liability and comprehensive insurance are usually taken out with the same provider. Providers often offer discounts for combination packages, so it is not worthwhile to take out liability and comprehensive insurance with different providers. Whether fully comprehensive or partially comprehensive is a good idea often depends on the age and condition of the car. The older the car, the less useful fully comprehensive insurance usually is.

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