THE GUIDE TO PURCHASING A CAR
Finance and Insurance
The consumer must be fully aware that upon purchasing a car there is a mandatory legal requirement to purchase insurance that covers bodily injury to third parties. It is therefore crucial that an individual know about insuring their vehicle and themselves against various risks. This additional expenditure must be considered before one decides to purchase a car. It should also be noted that that most banks, before giving out car loans, require an individual to purchase insurance for the car, and possibly life insurance as well. There are three main categories of car insurance that consumers should know about:
Compulsory Car Insurance
This type of insurance is compulsory by Lebanese law as of May 1, 2003, requiring each driver to have this bare minimum coverage before sitting behind the steering wheel of a car. In case of an accident, it indemnifies third party victims for bodily injury exclusively.
Third Party Liability - Material Damage
This type of insurance constitutes an extension to the bodily injury insurance and can be subscribed to separately. It grants third party material damages liability up to a certain amount, depending on a person’s insurance provider.
All Risk Insurance
This type of insurance includes third party bodily injury liability and third party material damages, in addition to covering other risks such as material damages to the vehicle, fire and explosion damages of the insured car, theft or theft and hold up, and replacement of the car in case of reparation or total loss. The extent of coverage under this type of insurance is always determined by the contract between the car owner and his insurance company.
To sum up, it is AIA’s recommendation that individuals be prudent and pay careful attention to the issue of insurance, and decide their insurance coverage level according to their vehicle and the manner in which one utilizes it, while taking into consideration the safety conditions on the roads.
