Third Party Car Insurance vs Comprehensive Car Insurance

By: Dinesh Mittal

Third Party Car Insurance
A third-party car insurance offers cover against damage to a third party when you’re at fault. It covers injuries caused to the driver, passengers, as well as damage to the vehicle or property. However, your own car is not covered under this policy.

The following are some of the major advantages of a third-party car insurance:
• It offers coverage in case of any legal liability for death or injury of an individual. You are also covered for losses incurring due to property or vehicular damage.
• You are required by the law to have a third-party liability coverage under the Motor Vehicles Act, 1988, so this takes care of that.
• Due to a limited cover, the premium for a third-party car insurance is easy on the pocket.

Comprehensive Car Insurance:
As the name suggests, a comprehensive car insurance offers a broad coverage which comprises of all kinds of damages, such as vandalism, hurricanes, and floods, thefts, etc. It also comes with a personal accident cover and legal liability to third party cover.

You can also expand your comprehensive coverage further by investing in add-on coverages such as medical expenses, zero depreciation cover, engine protector, and more. A large number of people opt for comprehensive car coverage over third-party coverage because unlike the latter which’s more of a bare-bones coverage; it offers an end-to-end coverage.

Comprehensive car coverage provides insurance for the following:
• Fire damage
• Damage to a third party
• Floods, hurricanes, tornadoes, and other acts of God.
• Vandalism and thefts
• Damage from a falling object such as an electricity pole, etc.
• Damage from hitting an animal

A comprehensive coverage can really come in handy, especially when your car is an upper-end model. However, it’s important to know that even with this kind of insurance there are some exemptions that aren’t usually covered. These include:
• Mechanical or electrical breakdowns
• General wear and tear on the car
• Damages caused due to drunken driving
• Damages to the tires and tubes.
• Damages due to an accident in which the driver didn’t have a driving license
• Depreciation, unless covered otherwise
The following are some of the major advantages of a comprehensive car insurance:
• Accidents caused due to stray dogs or other animals are more common than you think. However, a comprehensive car insurance policy will cover all the damages in such incidents.
• Third-party liability cover, which is a legal requirement, comes pre-covered in a comprehensive insurance.
• Depending on your requirements you can invest in selective add-on covers such as engine cover, personal injury cover, etc.

Third Party Car Insurance vs Comprehensive Car Insurance
The insurance requirements of one person may not necessarily be the same for another. So, by understanding the differences between a third-party car insurance and a comprehensive car insurance you can easily pick the one that suits yours.
Here’s how Third-party car insurance stacks up against Comprehensive car insurance.
Type Third-party Insurance Comprehensive Insurance
What does it cover? It covers the damages caused to another individual or their property due to accidents. In addition to third-party liability coverages, it covers all kinds of damages caused to your vehicle because of accidents, sabotage, fire, theft, natural calamities, etc.
What does it not cover? (Exclusions) Damage caused to:
Own vehicle
The injury caused to:
Damage caused due to:
- Theft
- Natural calamities
- Sabotage
- Fire
- Civil disturbance

Damage caused when:
- Driving/riding without a valid license
- Driving under the influence of drugs or alcohol
- The policy is not active
- Loss of personal belongings kept in the car. Damage caused when:
- Driving without a valid license
- Driving under the influence of drugs or alcohol
- The policy is not active
- Loss of personal belongings kept in the car

What are the add-ons?
Third-party liability insurance comes with an additional personal accident or PA cover.
- Engine protection
- Zero Depreciation
- Return to Invoice
Note: Personal accident cover is already included in the primary coverage
Which is the cheapest?
Third-party insurance is the cheapest considering it is the most basic type of policy with a low number of inclusions. In fact, IRDAI fixes the rates of the third-party component in car insurance on the basis of the engine capacity of your vehicle. These rates are revised every year or so. Since it offers a wide coverage, you pay a higher amount as the Comprehensive insurance premium.
The premium would have two primary components: Third-party premium (as fixed by IRDAI) and own-damage premium.

Which is the best?
Has limited coverage and does not cover you or your car. Such a policy offers an extended coverage. It covers you, the third party and both party’s vehicles. So, it keeps you financially protected in all cases.

The following are the main differences between the two types of insurance covers:
• Third party car insurance is the minimum insurance cover that you need to get to fulfill a statutory requirement as per the Indian Motor Vehicles Act, 1988. However, a comprehensive insurance cover offers a lot more and is inclusive of a variety of instances.
• Due to the extensive coverage offered by a comprehensive car insurance policy, its premiums are usually higher than a third-party car insurance policy.
• Third-party insurance will only cover the third-party vehicle. However, a comprehensive insurance covers your own vehicle too.

To highlight the obvious, a third-party car insurance and comprehensive car insurance have their pros and cons. Your choice, thus, should be based on your personal requirements. If you drive a lot, are willing to pay a high premium, want protection from natural calamities, fire hazards, and other kinds of possible incidents that can damage your vehicle, then it’s best to get a comprehensive insurance policy.

On the other hand, if you don’t want to pay high premiums and can deal with car damages on your own, or if your car is not highly valuable, then you can consider getting a third-party car insurance policy, which is the bare minimum.

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