Third Party vs Comprehensive Car Insurance

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Difference between Comprehensive and Third Party Car Insurance

Choosing the right kind of insurance cover for your vehicle is crucial in India. To choose the best type of coverage that your vehicle requires, you should be aware of the scopes and advantages of different types of car insurance coverage available for your four-wheeler.

Types of Car Insurance Plans

There are mainly two types of car insurance cover available in India

Third Party Insurance

This type of car insurance cover is meant for covering your liability towards the third party in case of an accident when damage is caused to third party vehicle, property or life by your own vehicle. Third party car insurance takes care of your legal liabilities towards the damage incurred upon the other party.

Comprehensive Insurance

As the name of the insurance suggests, comprehensive car insurance provides all-inclusive cover to the policy owner. On the one hand, it provides extensive coverage to your vehicle from damage or loss while on the other hand; it provides coverage to your liabilities towards third party loss or damage.

Difference between Third Party and Comprehensive Cover Insurance

Third party and comprehensive insurance differ from each other regarding their purpose and coverage. Here are the major differences between liability only cover and comprehensive plan:

Third Party Insurance

Comprehensive Insurance

This is a liability coverage insurance plan which is only designed to cover your legal liabilities towards third-party damage or loss.

This is an all-round cover for your four-wheeler vehicle. It takes care of your third-party liability and at the same time provides coverage to your own vehicle.

Third party insurance does not provide any coverage to your own vehicle.

It provides extensive protection to your own vehicle. Damage, theft or permanent loss of your own vehicle is covered by this policy.

Liability only insurance or third-party insurance comes at lower premiums. Since only third-party coverage is available in this type of policy, premiums are much lower than the comprehensive plans.

Comprehensive insurance comes at higher premiums than third-party insurance because this type of car insurance provides wide-ranging protection to your own vehicle as well as coverage to third-party loss and damage.

Third party insurance is chosen by those who have an old vehicle, or the value of the car is low.

This type of extensive protection motor insurance is taken by those who have bought brand new four-wheeler of high value.

What are the benefits of Third-Party Car Insurance?

Third party car insurance which is also known as a liability only insurance plan is mandatory in India. Below are the benefits offered by third-party insurance plan:

This type of car insurance protects you from the legal responsibility if any loss or damage is caused by your four-wheeler to some other vehicle, property or lives.
It provides financial assistance to the third party on your behalf.
Third party car insurance provides coverage to both ‘no-fault claim’ and ‘fault liability claim’.

What is not covered in Third Party Policy?

Third-party car insurance plan does not cover any damage of your own vehicle. It does not protect your own four-wheeler from damage, theft or loss.

What are the benefits of Comprehensive Car Insurance?

This type of four-wheeler insurance provides wide-ranging coverage facility to the policy owner. Some of the benefits of comprehensive car insurance are:

It provides all-inclusive protection to your own four-wheeler.
It protects your car against damage or loss of the vehicle which may be caused due to natural calamities like earthquake, storm, flood, etc., or man-made activities like theft or vandalism.
It also protects from unexpected damages caused to your four-wheeler by birds and animals or any falling object.
This type of car insurance also provides coverage to the personal accident. It takes care of injuries of the driver of the car in case of an accident.
Moreover, third party liability coverage is also an integral part of the insurance. The third party coverage is as extensive as a liability only insurance plans.
The third-party liability cover within comprehensive insurance provides protection towards the legal liability which may arise due to damage or loss of third party vehicle, property or life caused by your four-wheeler.
The third-party cover within comprehensive insurance takes care of both legal and financial assistance in case of an accident involving third party loss and damage.
It also covers your car from any damage from fire accidents

However, there are certain exclusions in comprehensive car insurance also:

  • Comprehensive insurance does not cover the damage of the four-wheeler caused due to normal aging of the vehicle.
  • It cannot protect your four-wheeler from the depreciation of the value of the car over time.
  • Comprehensive insurance does not cover any damage or loss of the car the person driving it does not have a valid driver’s license or any accident caused due to drunken driving.
  • Damage of vehicle parts which are made up of fiber or rubber is not fully covered within the insurance.
  • The policy does not cover damage or loss due to nuclear attack or war.

What are the factors to consider before buying car insurance?

  • You should check for your car's IDV
  • You should gauge your car's age and check what will be the right addons for your car
  • Depending on the usage of your car you should decide to take Third party or comprehensive insurance. If you are not planning to use your car too much, then a third-party car insurance works, or else it is advisable to go for a comprehensive car insurance.
  • So, don't forget to add an extra layer of protection to your car with a car insurance policy!


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