All Thai cars must be insured. The coverage provides for the following
- Medical Expenses – up to ฿ 80,000 per person
- Loss of a Vital Organ – Between ฿ 200,000 and ฿ 500,000
- Death and Permanent Disability – ฿ 500,000 per person
- Daily Compensation – ฿ 200 baht per day up to 20 days
The purpose of the law is to ensure people receive treatment and victims and their families receive support. It forms part of the government’s welfare effort.
Every car is legally required to have this insurance. Compulsory car insurance in Thailand must be renewed each year before the annual car tax is paid. It is necessary for all cars in Thailand even those brought in from other countries. Not having this insurance is punishable by a fine not to exceed ฿ 80000.
The level of coverage given by compulsory insurance is low and therefore there is also insurance available which is optional. This provides better coverage than the legally required insurance.
There are five types of voluntary car insurance. These categories are 1, 2, 2+, 3, and 3+. Each of these offers increased benefits and is aimed at various targets.
This category is aimed at cars that are less than 5 years old, cars that are frequently used as well as new drivers. It covers damage in the event of accident, fire, theft, or natural disaster as well as third-party insurance which provides coverage against injury or property damage to other people.
Categories 2 and 3
These are the most affordable voluntary insurance categories and provide the lowest benefits. Type 2 covers for fire and theft as well as third party. Type 3 covers third party
This class of insurance is best for cars that are used regularly but are parked at high risk. The cover is for accidents, fires, and floods.
Category 3+ is ideal for cars that are seven years or older that are regularly used and are not parked safely. The focus of this type is third party insurance
It is possible to reduce the amount payable on the insurance premiums by accepting an excess. This means that you pay an amount towards repairs and the insurance company pays the balance.
What this means is that if you buy a policy with an excess of ฿ 1000 and an incident causes ฿ 10000 damage to your vehicle, you will pay ฿ 1000 toward the repairs and the insurance company will pay the balance of ฿ 9000. It is the amount in excess of what you paid.
Excess is not as easy as it seems and may not necessarily mean a saving. Take the case above. Let’s assume that accepting the ฿1000 excess reduced your premium by ฿500 a year. If there is an accident and you pay the ฿1000 that is more than you saved by having an excess. If you were saving ฿1500 on the premiums and there was one accident you would be saving money. If there was a second accident then you would have a second excess to pay and lose over what you would have paid for excess free insurance.