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Compare: Comprehensive Vs Third Party Insurance
What is the Difference Between Comprehensive and Third Party Insurance?
The main difference between third-party and comprehensive insurance is the kind of coverage it offers. While a Third-Party insurance only covers you against third-party damages and losses, a comprehensive car insurance will cover for your own damages as well.
Choosing the right kind of insurance for your vehicle is crucial in India. After all, having at least a basic insurance that covers for third party is part of the law. Not having one can lead to traffic violations fines and can even lead to the disqualification of your driving licence!
To protect you from both hefty fines and damages and losses that could arise due to mishaps both big and small such as accidents, collisions, floods, theft, et al, it’s important to understand the difference between a comprehensive car insurance and third party car insurance and accordingly decide on what will suit you and your car better 😊
What is Comprehensive Car Insurance?
A comprehensive car insurance is one of the most preferred types of car insurance policies, as it covers for not only third-party liabilities and losses but, also covers for damages caused to you and your own car.
Benefits of Buying a Comprehensive Car Insurance
1. Covers for Your Car’s Damages
The primary benefit of getting a comprehensive car insurance is, it protects your car from any unfortunate damages and losses due to accidents, collisions, fires, etc.
This way, you don’t only save on unforeseen expenses but, also ensure your car will stay in good shape, even in the case of a mishap.
2. Protects your Pocket from Third-Party Liabilities
One of the main reasons people get any type of car insurance, is to comply with the law and, protect themselves from losses in case of any third-party damages.
What’s great about a comprehensive car insurance is, that while protecting you and your car, it also protects you from losses in case you damage a third-party person or property.
3. You can Customize your IDV
At Digit, we believe you know your car the best. That’s why, while buying a comprehensive car insurance online, we give you the option to customize your IDV, i.e the market value of your car. This will directly then affect your premium and claim amounts.
4. Opt for Add-Ons for Better Coverage
Most people prefer a comprehensive car insurance because you can customize your policy just the way you want, by picking add-ons to extend the kind of coverage your car can receive.
Some of these add-ons include the return to invoice cover, engine and gearbox protection and, consumables cover amongst others.
5. Cost Effective
Although the premium of a comprehensive car insurance is higher than that of a third-party car insurance, it still turns out to be a lot more cost effective since the coverage and benefits you receive with a comprehensive car insurance is a lot higher, saving you a lot of money in the long run!
6. Protects your Car During Natural Disasters
Nobody can control nature’s many furies. But, with a comprehensive car insurance you can at least protect your car from any damages that are caused due to the same.
So, whether your car is damaged due to a flood, cyclone or earthquake- your car will be protected through it all.
7. Compensates you in case of Car Theft
Car thefts are the worst! Within minutes you can lose out on one of your most prized possessions.
Thankfully though, a comprehensive car insurance can help you in this case by compensating for the loss of the same.
8. You Can opt for Breakdown Assistance
A Breakdown Assistance is one of the many add-ons available in a comprehensive car insurance. But, what makes this add-on special is that it never counts a claim.
So, whether you’re stuck midway or are having a little breakdown, we’ll just be a ring away and it won’t even count as a claim!
9. Avoid Depreciation with Zero Dep Cover
Everything loses value over time. But, if you’ve opted for a zero-depreciation cover in your comprehensive car insurance, you can keep your car as good as new.
This basically means, you can avoid the depreciation on its parts and therefore get more money during claims due to the same! Sounds great, doesn’t it?
However, there are certain limitations too, such as:
- A comprehensive car insurance does not cover for damages caused due to normal aging and wear and tear of your car.
- It cannot protect your four-wheeler from the depreciation of the value of the car over time.
- Damage of vehicle parts which are made up of fiber or rubber are not fully covered within the insurance.
- The policy does not cover for damages and losses caused due to a nuclear attack or war.
Exclusions in a Comprehensive Car Insurance
1. Driving Drunk
Any claims made in a situation where you were driving under the influence of alchohol won’t be covered even in a comprehensive car insurance.
2. Driving without a License
As per the law, your claims won’t be covered for if you were driving without a valid driver’s license.
3. Driving without a valid License Holder
As per the law, we can’t cover for you if you were driving with a learner’s license, without a valid license holder in the front passenger seat.
4. Consequential Damages
Consequential damages are those that take place after the accident. Unless covered for in an add-on, such damages can’t be covered for even in your comprehensive car insurance.
5. Contributory Negligence
To simply put it, don’t do things you aren’t supposed to! 😊 For example; if there are floods in your city, don’t take the risk and take your car out. Listen to your manufacturer’s manual cause such negligences can’t be covered for in your comprehensive car insurance too.
6. Add-ons Not Bought
This is pretty obvious, isn’t it? In case you haven’t bought a particular add-on while buying your comprehensive car insurance, you can’t claim for its benefits!
What is a Third Party Car Insurance?
If you’re not going for a comprehensive car insurance policy, a third-party car insurance is the most basic, and legal form of car insurance policy you will need. As the name suggests, this will only protect you from damages and losses caused to a third-party and won’t cover for your own damages.
Benefits of Buying a Third-Party Car Insurance
1. Covers for Third-Party Liabilities
The main purpose of a Third-Party car insurance is to cover you from losses and damages caused to a third-party due to your own car. So, this includes situations such as if you bump into a car or damage one’s personal property. In such cases, your third-party car insurance will cover for the losses incurred.
2. Helps you Drive Legally on Indian Roads
As per the Motor Vehicles Act, every car needs to at least have a third-party car insurance to drive legally on Indian roads.
3. Protects your Pocket from Traffic Fines
Since at least having a third-party car insurance is mandatory by law, not having one can lead you to pay hefty penalty fines. Therefore, having a third-party car insurance can protect your pocket from spending on traffic fines!
Exclusions in a Third-Party Car Insurance
1. Own Damages
As the name suggests, a third-party car insurance will only cover for third-party related liabilities and damages to one’s own car won’t be covered under this policy.
2. Drunk Driving or Without a Driver’s License
A third-party car insurance won’t cover for your third-party claims if you were found driving under the influence of alcohol, or without a valid driver’s license.
3. Driving without a valid Driving License holder
If you hold a learner’s license and were driving without a valid driving license-holder in the front passenger seat - then your claim in those situations won’t be covered.
Difference between Third Party Insurance and Comprehensive Insurance
Third party and comprehensive insurance differ from each other regarding their purpose and coverage. Read the difference between third party insurance and comprehensive insurance:
Third Party Car Insurance
Comprehensive Car Insurance
This is the most basic car insurance plan that only covers for damages and losses your car could cause to any third-party person, vehicle or person.
This is an all-round cover for your car- it only takes care of your third-party liabilities but also covers for you and your own car.
It only offers coverage for third-party damages and losses such as if due to an accident or collision, you hurt a third-party person, his/her vehicle or a third-party property. Additionally, it also includes a personal accident cover to protect you from personal injuries or death.
The coverage under this is extensive as it not only protects you against damage and losses caused to any third-party but, also covers for damages and losses to you and your own car. For example: If your car faces damages due to the floods in the city, your comprehensive car insurance will cover for it.
It protects you in case you accidentally hurt somebody on the road, or damage one’s vehicle/property. This way, you know you don’t have to dent your pocket in the case of such incidents.
It protects both damages to your own car and third-party damages as well. So, no matter what- you know you won’t end up in any losses! Additionally, you can also benefit from an NCB (No Claim Bonus) during car insurance renewals for every year you don’t make a claim!
It doesn’t cover for damages to your own car.
It is slightly more expensive than a third-party car insurance.
No customizations are possible under this car insurance plan.
You can customize your car insurance plan by adding specific add-ons and covers such as the zero-depreciation cover, engine and gearbox protection, Return to Invoice, Breakdown Assistance, etc
Cheaper than a comprehensive car insurance policy, the premium price here is predetermined by the IRDAI based on your car cc.
Although higher in price, the premium here is based on many more factors such as the city you drive in, your car’s make and model and of course, the add-ons you opt for (if any).
If you are currently driving a very old car, or you rarely drive then maybe having a basic third-party insurance would be sufficient for you.
Although slightly more expensive, this plan would give you complete coverage this proving to be more beneficial. Additionally, even if you don’t make any claims in a year, you can benefit from a No Claim Bonus discount during renewals.
Reasons to Upgrade to a Comprehensive Car Insurance
1. To Cover for Your Own Damages
Get covered for your own car’s damages and losses that could arise due to unforeseen circumstances such as accidents, collisions, monsoon floods, fire, et al.
2. To Cover for Third-Party Liabilities too
Also get covered for all third-party related liabilities such as if you hit and damage someone’s vehicle, injure a third-party person or damage someone’s property.
3. To Customize your Policy for Better Coverage
Customize your car insurance further by opting for different add-ons and covers that would give your car better coverage. For example: Opting for breakdown assistance/roadside assistance in your policy gives you the benefit of asking for our help for matters both big and small. Similarly, opting for a zero-depreciation cover ensures we don’t deduct your car's chargeable depreciation during claims.
4. You can Customize your IDV
Under our comprehensive car insurance policy, you also have the option to customize your car’s IDV.
5. Personal Accident Cover Included
With a comprehensive car insurance policy, you don’t need to separately opt for a personal accident cover as a comprehensive policy automatically covers for it all.
Note: If you currently have a third-party liabilities policy only that is yet to expire, you can go for a separate Own Damage Only Policy, to get coverage on your own car as well.
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 decide on the right addons for your car
- Depending on the usage of your car you should decide on taking a third party or comprehensive insurance. If you are not planning to use your car too much, then a third-party car insurance could work, or else it is recommended that you go for a comprehensive car insurance.