How to Claim and Get Car Insurance in Pakistan?

This insurance covers the damage to your car by another vehicle in an accident, crash with an object like a fence, and single-car rollover accident.

Regardless of its importance, the local consumers do not go for car insurance in Pakistan for multiple reasons. This article discovers benefits, laws, and processes surrounding car insurance by answering the most frequently asked questions.

Why Must You Get Car Insurance in Pakistan?

Law About Car Insurance in Pakistan

Surprisingly, there is a proper law on car insurance in Pakistan, which bounds every owner to insure their car. The law requires that the owners must have Third Party Insurance, meaning if other vehicles face some damage in an accident, including injury, you must have the insurance to pay the loss.

Otherwise, you will face a fine and might face some punishment. But the law only exists in documents as there is no implementation in the country. Many people either don’t opt for the insurance or don’t know about it.

Types of Car Insurance

There are mainly three types of car insurance in Pakistan, which are:

  • Third-Party Liability Car Insurance.
  • Comprehensive Car Insurance.
  • Collision Car Insurance.

1. Comprehensive Car Insurance

This is the most suitable car insurance for the owners as it covers the driver, their car, and damages to the third party involved in the accident. Furthermore, this insurance covers you in case of all kinds of accidents, including floods, riots, theft, and fire.

Comprehensive car insurance allows you to claim for accidents that happened because of your fault. Then, in case of theft, it will help you replace the car quickly.

2. Third-Party Liability Insurance

This insurance covers the damages of the third party after an accident due to your fault. However, it doesn’t cover damage to your car and theft of your vehicle. This insurance will only pay for damage to a third party’s car and injuries of the driver/passenger of the other vehicle. In short, it will protect you against damage caused by you.

3. Collision Car Insurance

This insurance covers the damage to your car by another vehicle in an accident, crash with an object like a fence, and single-car rollover accident. Importantly, this insurance doesn’t cover damages due to natural disasters or weather conditions in Pakistan.

Furthermore, collision car insurance doesn’t cover injuries to other drivers in an accident, accidents with animals, theft/vandalism, and losses other than auto damage in a collision.

How to Get Car Insurance in Pakistan?

There are two ways to obtain car insurance in Pakistan:

  • Bank Lease
  • Car Company

In the first case, it is a must to get insurance because the bank will not hand over the car to you without it. Secondly, you can get insurance through the car dealership from where you buy your car. You can tell the dealership about your favorite insurance company and get it.

How to Claim Car Insurance in Pakistan?

Most importantly, it depends on what kind of insurance you have; if it is comprehensive, all of your losses will be covered. Meanwhile, specific damages and losses will be covered in the other two types of insurance. So, there can be different scenarios for claiming the policy, which is:

  • Theft/Vandalism
  • Accident (Total Loss)
  • Accident (Partial Loss)

1. Theft/Vandalism

In case of theft of your car or a part of your car, you have to follow these steps:

  • File a police report/FIR about the theft or vandalism
  • Contact your car insurance company, tell them about the incident, and file a claim. The company will send you a confirmation message.
  • If you have gotten your car from the bank, visit that bank and fill out the claim form.
  • In the car company’s case, visit its dealership and share the essential documents. The exact process is applied for the insurance company.
  • You have to hand over the police report, CNIC, and Car Registration Card.
  • If your car is vandalized, meaning some part is stolen, then a surveyor from the company will visit you to confirm the vandalism.
  • Then the surveyor will estimate the damages, and the process will start as you and the company will decide on a workshop/dealership for reinstalling that spare part; you will visit that and get the new part.
  • It is important to remember that you have to pay a specific percentage of the complete payment, also called depreciation, and it will only be applicable only on parts, not on car paint.
  • Also, in case of car theft, the process may take a more extended time, and the company will offer you payment or a car as a replacement, depending on the company.

2. Accident (Total/Partial Loss)

As mentioned earlier, if you have comprehensive insurance, it will cover your and third-party’s damages. Meanwhile, Third-party car insurance will only cover the loss of another person if the accident happens due to your fault. Before telling the process, let us tell you that there are two types of accidents, i.e., total loss (40 – 60% damage of your car) and partial damage to your vehicle.

Moving forward, in case of an accident:

  • Call the insurance company, and it will appoint a surveyor, and they will check the estimated loss.
  • Surveyor will assess and prepare a report.
  • The insured car can either go to the appointed workshop on the insurance company panel or to a workshop of his own choice.
  • We suggest you visit the workshop on the company’s panel because the insurance company will undertake all expenses (except depreciation).
  • Meanwhile, in case of the workshop of your choice, the owner will pay all dues on his own at that time, while the insurance company will return the payment within 15 to 30 days after receiving the surveyor’s final report. It means it will be more hassle for you.

What is Depreciation?

In easy words, depreciation is the percentage of the money you will pay in case of accident or theft. If your car is new, you will pay 5% depreciation within six months of purchase and 10% after a year. And it will continue to increase by 10% on an annual basis, and its maximum limit is 60%.

In other words, as your car gets older, the depreciation will continue to rise with the passage of every year: the older the vehicle, the higher the depreciation.

Age Chart of Car Insurance in Pakistan

Most companies cover ten-year-old vehicles for car insurance in Pakistan, but some offer plans for 2005 onwards. So, if you own an old car, check the company’s policy before getting insurance.

What does Car Insurance in Pakistan Not Cover?

The car insurance in Pakistan does not cover:

  • Lamps, tires, mudguard, bumper, and paintwork.
  • The insured vehicle/ accessories were damaged due to a fire by an external explosion.
  • Self-Ignition or Lightning during regular running hours while in any garage or on the road.
  • Lastly, commercial vehicles are only covered in the case of “Total Loss.”

Is Car Insurance in Pakistan Transferable?

The insurance policy cannot be transferred to a person, but it can be transferred from one car to another. It means the plan can be transferred from vehicle to vehicle. The client can avail adjustment for his new car for the remaining tenure.

Geographical Boundary of Insurance

Most companies cover the loss/damages of a vehicle across the country. However, some companies deal provincially, so always check this aspect before getting a policy.

Does Insurance Cover Mechanical Losses?

No, Insurance covers accidental losses, not mechanical.

What are your thoughts on this? Please share with us in the comment section below.

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