What is the difference between first-party claims and third-party claims?

The policyholder makes the first-party claims to get coverage for damages caused to their vehicle. In this case, the policyholder directly gets the claim benefit. In case of third-party claims, the policyholder makes the claim to cover the third-party liabilities. Here the third person who suffers any damages gets the claim amount. Basically, the first party is the policyholder, the second party is the insurer, and the third party is the third person.

What is first-party vehicle insurance?

First-party vehicle insurance, a type of motor insurance policy, covers the damages caused to the insured vehicle. First-party car insurance covers damages caused to the insured vehicle by accident, fire, or natural disasters. Also, offers third-party liability cover. You also get personal accident cover up to Rs. 15 lakh to the owner-driver.

What is the difference between comprehensive and third-party car insurance?

A comprehensive car insurance provides coverage for own damages as well as third-party damages. You get wider coverage for damages caused due to theft, natural disasters, fire, or personal accident. Third-party car insurance provides coverage only for third-party damages caused by the insured's vehicle.

What is first-party car insurance?

First-party car insurance, commonly known as comprehensive car insurance, is a type of motor insurance. This insurance policy covers both damages caused to the insured vehicle and to the third party.

What does first-party car insurance cover?

First-party car insurance covers own damages as well as third-party damages. You get coverage for damages caused to the insured vehicle in case of an accident or natural disaster. Also, covers damages caused due to theft, fire, or any other perils. It covers damages caused to the third party's vehicle, or property, even injuries caused to the person.

Which type of motor insurance is mandatory?

The Motor Vehicles Act of 1988 mandates every car owner to have a valid third-party car insurance policy.

Which is a better insurance policy: first-party or third-party car insurance?

Both first-party and third-party car insurance policies have their own importance. Comprehensive car insurance provides complete coverage that includes third-party liabilities as well as own damages, making it a wise option to choose. Whereas third-party car insurance will only give coverage for third-party liabilities. The premium for comprehensive car insurance is generally higher than the premium for third-party insurance.

Can I buy both first-party and third-party car insurance?

If you buy a comprehensive car insurance policy, you will get the benefits of both first-party and third-party cover. If you have third-party car insurance, you can also buy a standalone own damage cover.

How is the premium for first-party and third-party car insurance calculated?

The premium for first-party depends on several factors. The insurer determines the premium based on the vehicle's age, make, and model. It also depends on the location, coverage type, and the insured's age and driving history. The IRDAI sets a standard premium for third-party insurance.

How do I file a claim for first-party insurance?

To file a claim for first-party insurance, you need to contact your insurance provider and provide them with details of the loss or damage incurred. You will need to submit supporting documents like photographs, receipts, and other evidence as required to substantiate your claim.

Is first-party insurance the same as comprehensive insurance?

No, comprehensive insurance is a combination of first-party insurance and third-party insurance, which covers damages caused by you to other vehicles and properties. First-party insurance typically only covers damages to your own vehicle and personal property.

Can we convert third-party insurance to first party?

During the policy renewal phase, you have the option to request your insurance provider to transition your policy from a third-party to a comprehensive one. Simply choose a comprehensive car insurance policy instead of a third-party car insurance policy during renewal.

When to choose third-party insurance?

You can consider buying a third-party insurance when you want to meet legal requirements with minimal coverage. It covers damages to others in accidents but does not protect your vehicle. It's a cost-effective choice, especially for older or lower-value cars.

Is third party insurance enough for car?

While third-party insurance meets legal requirements, it may not be sufficient for comprehensive coverage. It covers damages to others but not your vehicle. Consider factors like the car's value and usage, opting for additional coverage if needed.

First-Party vs Third-Party Car Insurance

2 mins

20-June-2023

The advent of digitalisation across businesses has made purchasing car insurance policies more convenient than before. All reputed insurance companies sell their plans online through various channels. This has made comparing and choosing a car insurance policy suited to your requirements far easier than before.

Here are different types of car insurance policies and their major differences.

Different parties involved in car insurance policy

The primary entities involved in a car insurance policy are the policyholder, the insurance company, and third parties. First-party car insurance involves the policyholder, who purchases coverage directly from the insurer to protect their own vehicle. This coverage encompasses damages incurred by the insured vehicle due to accidents, theft, or natural disasters.

On the other hand, third-party car insurance involves three key parties: the policyholder (first party), the insurance company (second party), and any other individual or property not associated with the insurance contract (third party). In this scenario, the insurance company provides coverage for damages caused by the policyholder's vehicle to third-party individuals or property. Discussed further in this article are the different types of car insurance in detail.

Types of car insurance

There are primarily three types of vehicle insurance plans in India. Read on to know about them.

1. First-party car insurance

First-party car insurance, as the name suggests, refers to the coverage of the policyholder’s own vehicle against financial loss or damage. Should an insured car be stolen, vandalised, damaged in an accident, or due to any natural calamity, first-party insurance takes care of the losses incurred by the vehicle owner. In short, it covers the losses a policyholder can suffer because of damage caused to their own car.

The importance of first-party car insurance cannot be overstated as it provides peace of mind, knowing that should an unfortunate event take place, one's vehicle is covered. With many car insurance policies available in the market, first-party car insurance is among the most commonly bought types of coverage.

2. Third-party car insurance

A third party can be anyone under a vehicle insurance plan other than the first party. It refers to individuals who can get affected by the first party's actions while driving the insured vehicle.

In case of any accidental damage caused to the third party's property or vehicle, the first party must compensate for the damages. The insurance company will handle the liabilities as an essential part of third-party insurance.

Compared to a comprehensive car insurance plan, a third-party car insurance plan come at a lower price due to the limited coverage and benefits. The Motor Vehicles Act mandates every vehicle owner to have third-party insurance by law. You may pay a hefty fine or face legal consequences for not having third-party insurance.

3. Comprehensive car insurance

A comprehensive car insurance policy combines the advantages of both, first-party and third-party insurance. You can also choose to enhance your car insurance plan with add-on covers.

Knowing the different terms used in the insurance domain can benefit policy buyers when making claims. Also, when purchasing the plan or renewing the car insurance plan.

Difference between first-party and third-party car insurance

Here’s a quick look at the difference between a first-party vs third-party insurance plan:

Differentiating points	First-party insurance	Third-party insurance
Meaning	First-party car insurance caters to the vehicle of the person who purchases the insurance policy.	A third party in an insurance policy can be anyone. To specify, it can be any individual or property that gets affected by the first party's vehicle.
Coverage	First-party insurance covers the damages or losses caused to the policyholder or his/her vehicle. Covers the damages sustained The damages can be sustained during riots, strikes, earthquakes, floods, fire, theft etc.	Third-party insurance covers damages or losses caused only to the third party due to an accident.
Accident cover	The first party gets a comprehensive personal accident cover on the policy. The first party is eligible to receive a substantial personal accident cover with such policies. The first party can raise a claim against it depending on the terms and conditions.	In case of an accident, the concerned third party will get coverage basis the Motor Accident Claims Tribunal’s decision.
Legal mandate	As per the Motor Vehicles Act of 1988, purchasing a first-party car insurance policy is not mandatory.	In this case, it is mandatory to purchase a third-party cover as per the Motor Vehicles Act of 1988.
Policy purchase	It is the first party who purchases the policy.	The first party/vehicle owner purchases the policy to cover the third-party liabilities financially.

After understanding the distinctions between first-party and third-party insurance, opt for a plan that aligns with your specific needs. To get motor insurance coverage, explore both car and bike insurance policies on the Bajaj Finance Insurance Mall website. Easily purchase any desired policy by following a few straightforward steps. Explore the differences between car insurance first party vs third party to make an informed decision.

Now that you have read the difference between first-party and third-party insurance plans and choose a plan that suits your requirements. To purchase such motor insurance policies seamlessly, visit the Bajaj Finance Insurance Mall website to explore both car and bike insurance policies. Purchase any policy by completing a few simple steps.

First-party (comprehensive) car insurance plans

Here’s a quick glance at first-party car insurance plans available at Bajaj Finance Insurance Mall.

Car insurance company	Network garages	Third-party cover	Personal accident cover	Claim settlement ratio
ACKO Car Insurance	-	Yes	15 lakh	95.45%
Bajaj Allianz Car Insurance	6,500+	Yes	15 lakh	98%
SBI General Car Insurance	6,600+	Yes	15 lakh	92%
ICICI Car Insurance	12,000+	Yes	15 lakh	93.40%
HDFC Car Insurance	6800+	Yes	15 lakh	91.23%
TATA AIG Car Insurance	7500+	Yes	15 lakh	90.49%

Secure your vehicle with budget-friendly plans

Bajaj Finance Insurance Mall offers various motor insurance and subscription plans at pocket-friendly prices. These plans cover various expenses that your current insurance plan may not include. For example, you can buy a Key Safeguard plan that covers the replacement cost of your car keys in case they are lost or stolen at a nominal fee of Rs. 749.

From accidents, illnesses, card fraud to mobile protection, Bajaj Finance Insurance Mall lets you choose from over 300 insurance or subscription plans across various categories and buy them through a 100% digital process.

Benefits of first-party car insurance

First-party car insurance offers several key advantages:

Coverage against damage to your own vehicle: First-party car insurance damages to your own vehicle, ensuring protection in the event of accidents, theft, or natural disasters.

Faster claims processing: Dealing directly with your insurer often results in quicker and smoother claims processing.

Personalised policies: You can tailor your coverage and opt for add-ons to suit your specific needs and preferences.

No dependence on third parties: You're not reliant on someone else's policy to recover your losses in case of an accident.

Cost savings: While first-party insurance may be slightly more expensive, it can ultimately save you money by preventing costly out-of-pocket expenses.

How to buy first-party and third-party car insurance on Bajaj Finance Insurance Mall?

Here is a step-by-step guide to buying a first party and third-party car insurance policy.

Step 1: Click on 'Get Quote’ to open the online application form.

Step 2: Enter the vehicle type, four-wheeler registration number, mobile number, and residential PIN code. Check the terms and conditions and click on the ‘Get Quote’ button below.

Step 3: Choose the IDV, NCB value, add-on covers, and plan type to get a list of relevant policies. You need to update your current policy expiry date here.

Step 4: Click on the ‘Buy Now’ button. You will need to add owner-driver personal accident cover mandated by the RTO. Click on ‘Next’ to proceed.

Step 5: Confirm the vehicle registration date and the previous policy type (comprehensive/third-party). Click on ‘Proceed’.

Step 6: Enter the vehicle owner’s name, date of birth, residential address, and contact number. Also, enter the vehicle engine and chassis number (as per the RC) and previous policy details.

Step 7: Review your previously filled details and make the payment through your preferred online payment mode. You can use net banking, UPI, credit/debit card to buy the policy.

After successful payment, your policy document will be available for you to download instantly. You will receive a copy of the policy document on your registered email ID within 5-7 working days.

You will receive an SMS confirmation immediately after the payment is processed successfully. You can also access your policy details through the My Account section within 5-7 days after purchase.

Difference Between First-party and Third-party Car Insurance

Different parties involved in car insurance policy