Motor insurance is the one policy almost every adult in Trinidad and Tobago holds, and the one fewest people have read. That is understandable — it is bought under time pressure, renewed by reflex, and only examined properly on the worst day of the year.
It is worth understanding beforehand.
The legal minimum
Under the Motor Vehicles Insurance (Third-Party Risks) Act, Chap. 48:51, every owner of a vehicle used on a public road must hold a policy covering third-party risks — injury to other people and damage to their property arising from the use of the vehicle. The certificate of insurance must be carried in the vehicle and produced on demand by a police officer or licensing officer.
Driving without valid cover is an offence. It exposes you to fines and the possibility of the vehicle being impounded — and, far more seriously, to personal liability for the full cost of any injury or damage you cause. In a collision involving serious injury, that figure can exceed anything you will ever own.
The three levels of cover
Third-party only
The statutory minimum. It pays for injury to other people and damage to their property. It pays nothing toward your own vehicle, in any circumstances — not if you cause the accident, not if it is stolen, not if it burns.
Sensible for an older vehicle worth less than a few years of premium difference, where you could absorb the total loss without difficulty. Unwise for anything you could not comfortably replace out of savings.
Third-party, fire and theft
Third-party cover, plus your own vehicle if it is stolen or destroyed by fire. Collision damage to your own vehicle is still not covered. In a country where vehicle theft is a genuine risk, this is often the sensible middle position for a vehicle of moderate value.
Comprehensive
Third-party liability, fire, theft, and damage to your own vehicle including collision — usually regardless of fault, subject to the excess. Most policies extend to windscreen cover, sometimes to a courtesy vehicle, personal accident benefits and limited cover for personal effects.
If the vehicle is financed, the lender will require comprehensive cover and will be noted on the policy. If losing the vehicle would seriously disrupt your work or household, comprehensive is the right answer.
The terms that decide what you actually receive
Sum insured and how a total loss is settled
Most policies settle a total loss at market value at the date of loss, not the value you insured or the price you paid. Insuring a vehicle above its market value does not increase the payout; it increases the premium. Insuring below market value, however, can trigger average — a proportionate reduction in a partial claim. Review the sum insured at each renewal against realistic local resale values.
Excess
The first portion of any claim that you pay. A higher excess reduces the premium and increases what a claim costs you. Check for additional excesses that apply in specific circumstances — young or inexperienced drivers, unnamed drivers, certain types of damage. These are commonly overlooked and commonly decisive.
Named drivers and permitted use
Policies restrict who may drive and for what purpose. Lending the vehicle to someone outside the permitted class, or using a private vehicle for hire or reward, can leave a claim unpaid. If you use your own vehicle for business — deliveries, transporting goods, carrying passengers for payment — tell your insurer. Business use on a private policy is one of the most common reasons a claim is declined.
No-claims discount
Built up over claim-free years and lost or reduced when you claim. Before submitting a small claim, compare the repair cost to the excess plus the discount you will forfeit over the following years. Sometimes paying for the repair yourself is the cheaper decision.
What to do at the scene of an accident
- Stop. Check for injuries. Call emergency services if anyone is hurt.
- Report to the police — required in cases of injury, and advisable in any significant collision.
- Exchange names, addresses, licence numbers, vehicle registration numbers, insurer and policy numbers.
- Photograph everything: both vehicles, all damage, the road position, signage, weather and light conditions.
- Take names and contact numbers of any independent witnesses.
- Do not accept blame or agree a private settlement at the scene.
- Notify your insurer promptly — policies impose short notification periods, and late notice can prejudice a claim.
Where cover most often falls short
- Business use on a private policy. If the vehicle carries stock, tools or paying passengers, the policy must reflect it.
- Employees driving company vehicles. Make sure the policy covers the actual drivers, not just the directors.
- The sum insured never revisited. A vehicle insured at its purchase price five years ago is over-insured; one insured on an outdated figure after prices rose may be under-insured.
- Third-party property damage limits. Check the limit. Modern vehicles and roadside property can produce claims well above older standard limits.
- Flooding. Understand precisely how your policy treats flood damage before the wet season, not during it.
Buying well
Compare like with like — the same excess, the same sum insured, the same driver restrictions — before comparing premiums. Ask what is excluded rather than what is included; the exclusions are shorter and more informative. Ask about the claims process and typical settlement times, because that is the product you are actually buying. And review the policy annually rather than renewing by default: vehicle values, your circumstances and insurers' terms all move.
The purpose of insurance is to convert an unbearable loss into a manageable one. Cover chosen only on price frequently fails to do that.
General information only. This article sets out general information about accounting, taxation and insurance matters in Trinidad and Tobago as understood at the date of publication. Rates, thresholds, forms and filing procedures change, and the right treatment depends on your particular circumstances. It is not accounting, tax, legal or financial advice and should not be relied on as a substitute for professional consultation. Please confirm current requirements with the Inland Revenue Division, the National Insurance Board, your insurer or regulator as applicable — or speak with us before acting.