One can buy one of two type of car insurance policies available in India. The first one is a Third-party Liability Policy and the second one is a comprehensive insurance policy. In this article, we will compare these types of car insurance policies. First, let’s understand what each type means.
What is Third-party Car Insurance?
A third-party car insurance policy is the most basic type of car insurance that can be bought in India. It covers the policyholder against the cost of third-party damages. The third party is any person other than the policyholder, insurer, or the passengers of the insured vehicles. Thus, pedestrians and other drivers become the third party. If the insured car causes damage to any third party or their property like vehicles, house, crop, etc. the third-party can be compensated under the third-party insurance. It is important to note that any damages to the insured car are not covered under third-party car insurance. Buying a third-party car insurance policy is mandatory under The Motor Vehicles Act, 1988. Every vehicle owner should comply to this rule in order to fairly compensate the third party for their loss. Compensation for the death of the third party is also covered under third-party insurance.
What is Comprehensive Car Insurance?
Comprehensive car insurance goes beyond offering a cover for third-party injuries or damage. Apart from including a third-party cover, comprehensive car insurance also covers damages to the insured car. Buying this type of car insurance is not mandatory as per the law, but it is highly recommended due to its extensive coverage.
For example, if driver A got into an accident leading to damages to his car as well as other cars plying around him. His insurance company will pay for the damage of all the vehicles involved in the accident as driver A has bought a comprehensive car insurance policy for his car. The coverage offered by a comprehensive policy is not limited to third-party damage or own damage due to accidents. One can also make a claim for getting the car repaired in case of damage from natural calamities like earthquake, landslide, floods, etc. Or in case the car gets damaged due to man-made calamities like vandalism, sabotage, riots, etc.
Third-party Vs. Comprehensive Car Insurance
Here is the coverage comparison for third-party and comprehensive insurance:
How To Compare Car Insurance Online?
To compare car insurance online, you can visit the website of any web aggregator. Comparing car insurance online will be easier if you know your requirements beforehand. Choose the type of policy that is most suitable for you. It is suggested to opt for comprehensive coverage as it is more beneficial in the long run. Select the type of policy and fill your details. You will be shown quotes from various insurance companies. Choose the one that is most suitable and buy the policy.
|Coverage||Third-party cover||Comprehensive cover|
|A personal accident cover for the policyholder or the driver||Covered||Covered|
|Injuries caused to the third party||Covered||Covered|
|Death compensation to the family of the deceased third party||Covered||Covered|
|Damage caused to third-party property||Covered||Covered|
|Legal liabilities arising due to an accident||Covered||Covered|
|Damage caused to the insured car due to an accident. Own damage||Not Covered||Covered|
|A theft cover that pays an amount approximately equal to the car’s current market value||Not Covered||Covered|
|Damage to the insured car caused due to the occurrence of a natural calamity like flood, earthquake, landslide, etc.||Not Covered||Covered|
|Damage due to a man-made calamity like vandalism, sabotage, riots, etc.||Not Covered||Covered|
|Extended coverage as per the Add-ons bought along with the policy.
Popular ones are:
Passenger Cover, etc.
|Not Covered||Depends on the cover chosen by the policyholder|
Also published on Medium.