The Ghanaian law stipulates in the Motor Third Party Act of 1958 that all vehicle owners must have a cover that provides bodily injury and death compensation to third parties such as occupants, fare-paying passengers, and pedestrians in the event of an accident
Thus, Motor insurance is an insurance policy that covers the policyholder in case of financial losses resulting from an accident or other damages sustained by the insured vehicle. A comprehensive motor insurance policy covers damages to third parties and third-party properties as well as compensation for policyholder’s losses.
When choosing car insurance, people often get confused about whether to go for a third-party insurance policy or a comprehensive insurance policy and we are here to differentiate between the two.
Third-Party insurance is cheaper as it covers damages only to the third party whereas Comprehensive insurance offers a wider coverage hence costs more in premium. In this article, we will look at the differences between the two and evaluate which would be the better option.

Third-Party Insurance
Third-party car insurance offers financial protection from legal liability towards a third party after an accident that leads to death, injuries, or property damage. It is, however, important to note that third-party car insurance does not provide coverage for the insured car nor for the policyholder.

Comprehensive Motor Insurance
Comprehensive car insurance, as its name would suggest, provides complete financial protection for the vehicle owner. It includes third-party insurance, own damage insurance, and personal accident cover (for the driver). Incidents like car theft, damage due to fire, damage caused by some natural disasters and manmade calamities, etc. are covered under a comprehensive car insurance policy. Policyholders can boost their coverage by including add-ons to the base plan.
It should however be noted that in Ghana, there is a third motor insurance product known as the Third Party Fire and Theft which covers the third party as well as damages due to fire or theft. The premium is higher than the mandatory Third Party and lower than the Comprehensive motor insurance.

Third-Party Insurance or Comprehensive Car Insurance
Although the law only makes it mandatory to have at least a third-party insurance cover in place, vehicle owners are often advised to get a comprehensive insurance policy, which includes third-party insurance among other benefits. Individuals who own high-valued or brand-new cars should definitely consider availing of comprehensive car insurance.
A comprehensive insurance plan will cost more in premiums when compared to third-party car insurance as it offers wider coverage. In case an individual’s budget won’t stretch that much, he or she can go for third-party insurance.
Having a motor insurance policy is a must for all vehicle owners in Ghana. Accidents can take place unexpectedly at any time, and it can heavily impact one’s finances. With a car insurance policy, an individual can have complete peace of mind. The car-owner would not have to worry about any sudden financial crunch that may arise in the event his or her vehicle is stolen or damaged.