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Comprehensive vs Third-Party Car Insurance

Comprehensive vs Third-Party Car Insurance

When it is about insuring one's car from damages or losses, insurance providers in India offer two popular options: comprehensive car insurance and third-party car insurance.

While a comprehensive car insurance policy covers one's car from both self-damage and third party liabilities, third-party car insurance reimburses damages done to only third parties. Hence, an individual must be well aware of particularities related to both the insurance forms to make an apprised decision.

The below-mentioned description will help one decipher the differences between comprehensive car insurance and third party car insurance.

What is a comprehensive car insurance plan?

As its name suggests, a comprehensive insurance plan extends coverage against both personal and third-party liabilities in the event of an incident. Opting for this policy is not mandatory by law; however, doing so will aid one to get better financial protection in case of any mishap.

Nonetheless, before buying a policy, one must go through the list of inclusion and exclusion to avoid facing any issues.

What is a third-party car insurance policy?

Indian Motor Vehicle Act has mandated that every vehicle owner must have a third-party car insurance plan in India. It is the most basic form of insurance that a vehicle owner must get. As the name suggests, third party car insurance, also known as liability cover, provides coverage for the damages and losses incurred on the third party vehicle and cannot be availed to protect one's car from personal injuries. The insurance policy is advantageous as the premium rate is low. Hence, if the policyholder is a safe and cautious driver, he or she can easily dodge the expensive annual premium rates.

Difference between comprehensive and third-party insurance

The table below will help one get better clarity regarding the difference between third-party and comprehensive insurance, and one can choose accordingly.

Comprehensive car insurance Third-party car insurance
This insurance policy extends extensive coverage, compensating for the expenses of a third party damage and covers for self-damage. This insurance covers only the damages done to the third-party vehicle, individual or property.
Comprehensive car insurance extends coverage for a slew of things, including accidents, and damages caused due to natural occurrence, along with covering third party liabilities. Third-party insurance cover extends protection to a third party car and the person who has got into an accident with the policyholder. However, it also offers protection for personal accidents and covers for one's injuries.
It generally comes with a wide range of coverage choices. On the other hand, liability covers come with premiums.
It is slightly more expensive than a third party car insurance. Price of premium is dependent on the manufacturer and model of a vehicle, the city where the car is being registered, add-ons and likes. As third party car insurance is stringent in terms of its offerings, it is generally cheaper. Moreover, the rates are pre-determined by IRDAI based on the cubic capacity of the car.
One of the standout features of a comprehensive car insurance plan is that policyholders can customise and include several add-on facilities like engine and gearbox coverage, roadside assistance cover, zero depreciation cover etc. However, in a third party car insurance, policyholders cannot go for such customisation.

Now, as one knows what the difference between comprehensive and third party insurance is, applicants, can easily choose a policy as per their requirements

How to choose between comprehensive and third-party car insurance?

Apart from knowing the differences between these two policies, a proposer must factor in several parameters before choosing between comprehensive and third-party car insurance.

Furthermore, one should also have a well-rounded idea regarding the claim settlement ratio of the insurer and basic terms and conditions associated with each plan before availing of it. All these pointers will help one effectively decide between comprehensive and third party insurance.

To sum up, rather than being at a loose end, availing of car insurance is vital to safeguard one's financial interests in the event of an accident. The insurer offers comprehensive car insurance and standalone third-party car insurance policies to cater to applicants' varied needs and budgets. However, one should weigh the aforementioned factors before going for either comprehensive or third party car insurance.

  1. One must know his/her requirements before opting for an insurance plan. For example, individuals who want extensive protection for their car must go for comprehensive car insurance. Furthermore, if the policyholder does not initiate a claim in a policy year, he/she will still be bestowed with No claim bonus (NCB). In this regard, one can go for comprehensive motor insurance policies offered by Bajaj Finserv and get bestowed with innumerable coverage options.

  2. Considering the premium amount, applicants should choose a policy based on their financial capacity. Since a third party car insurance is expensive when compared to comprehensive car insurance, if an individual wants a basic plan with a nominal premium, availing of a third-party car insurance plan is ideal. However, if one possesses a luxury car, it is recommended to go for a comprehensive cover.

  3. Looking for the add-ons is also vital while deciding between comprehensive vs third party car insurance. Add-ons bestow one with additional coverage options that a policyholder can purchase by paying extra premiums. One who is looking for additional coverage options must go for comprehensive insurance.

  4. Another primary factor that applicants must check is the claim process. One should prioritise an option that will provide prompt financial assistance during an emergency.

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