After purchasing a car or truck, owners are typically required to obtain several types of insurance, including compulsory third-party liability insurance and voluntary motor insurance such as body (physical damage) coverage. If you are considering whether this type of insurance is worthwhile, the following guide provides a clear and accurate overview.
What is car body insurance?
Car body insurance (also referred to as physical damage insurance) covers the external structure and components of the vehicle, including the cabin, grille, hood, fenders, doors, glass, lighting system, mirrors, wipers, and all exterior body materials (metal, plastic, or wood).
In the event of damage to these components, the insurer will cover repair or replacement costs in accordance with the agreed terms and conditions stated in the insurance contract.
How car body insurance is calculated
The premium is typically calculated using the following formula:
Insurance premium = Insurance rate (%) × Invoice value of the vehicle
(The applicable rate varies by insurer but generally ranges from 2% to 5% for trucks.)
Example: If you purchase a vehicle valued at VND 1,000,000,000 and the insurance rate is 2%, the premium would be:
1,000,000,000 × 2% = VND 20,000,000
Coverage benefits of car body insurance
Depending on the selected policy and insurer, coverage may include compensation for damage caused by:
- Accidental incidents beyond the control of the driver or owner, such as collisions, overturning, falling, sinking, fire, or explosion
- Natural disasters such as storms, floods, landslides, lightning, earthquakes, hail, or tidal waves
- Total theft or robbery of the vehicle
- Additional costs, including towing, roadside assistance, or engine restart services (subject to specific policy terms)
Insurers may also reimburse reasonable expenses incurred to prevent further damage or mitigate losses.
Key benefits of car body insurance
The primary benefit is financial protection. When insured risks occur, the vehicle owner is compensated—either through cash indemnity or repair/replacement—to restore the vehicle to its original condition.
Depending on the cause and severity of the damage, insurers may provide partial loss compensation or total loss settlement.
Covered risks by car body insurance
Car body insurance typically covers damage to the vehicle’s exterior caused by unforeseen and uncontrollable events, including:
- Traffic accidents (collision, overturning, falling objects)
- Fire or explosion (electrical faults, fuel leaks, lightning)
- Natural disasters (storms, floods, earthquakes, hail, falling trees)
Optional extended coverage may include:
- Partial theft (e.g., stolen parts)
- Water damage (hydrolock)
- Towing and rescue services
Coverage scope depends on each insurer’s terms and may exclude intentional acts or legal violations.
Common exclusions
To prevent misuse and unmanaged risks, insurers typically exclude:
Intentional damage or violations
- Deliberate damage caused by the owner or driver
- Driving under the influence of alcohol, drugs, or serious traffic law violations
Wear and tear
- Natural deterioration of parts such as tires, batteries, spark plugs
- Damage due to aging, poor maintenance, corrosion, or normal wear
Other exclusions
- War, riots, terrorism, or organized sabotage
- Use of the vehicle in racing or outside Vietnam unless specified in the policy
Conclusion
Car body insurance is an effective solution to minimize financial risks from accidents, scratches, or unexpected incidents. Choosing the right coverage and understanding policy terms ensures proper and sufficient compensation when needed.
For new vehicles or trucks operating frequently, this type of insurance is a practical and necessary investment for long-term, worry-free operation.
