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*|