Know the difference between first-party and third-party car insurance

Know the difference between first-party and third-party car insurance

Understand the key differences between comprehensive and third-party car insurance. Check plans and coverage details.

Get Quote
2 mins
15-April-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.

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

The first party indicates the person who purchases the insurance plan, referring to the car owner/policyholder. This first party pays the premium amount and raises a claim to receive compensation for its own damage if any. This is popularly referred to as the Own Damage plan.

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.


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 Premiums starting at
ACKO Car Insurance   - Yes Rs. 15 lakh  95.45% Rs. 2,762*
Bajaj Allianz Car Insurance  6,500+ Yes Rs. 15 lakh  98% Rs. 3,031*
SBI General Car Insurance  6,600+ Yes Rs. 15 lakh  92% Rs. 3043*

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.

Frequently asked questions

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, first party is the policyholder, second party is the insurer, and third party is the third person.

What is a 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.

Disclaimer

Insurance is the subject matter of solicitation. Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited and ManipalCigna Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. Visitors are hereby informed that their information submitted on the website may be shared with insurers. BFL is also a distributor of other third-party products from Assistance Services providers such as CPP Assistance Services Pvt Ltd, etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective value-added service provider or Assistance company.
Note – While we have made all efforts and taken utmost care in gathering precise information about the products, features, benefits, etc. However, BFL cannot be held liable for any direct or indirect damage/loss. We request our customers to conduct their research about these products and refer to the respective product’s sales brochures before concluding their sale.