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Third-Party Vs Comprehensive Car Insurance — Which Is The Best Choice?
As we all know, vehicle insurance policy is mandatory in India while buying a car. In fact, it's a legal requirement as per Motor Vehicles Act, 1988. There's no denying the fact that four-wheeler or two wheeler insurance offers you the safety and security from the loss or damage incurred due to an accident.
But, what type of car insurance should you choose? Vehicle insurance is broadly classified in two types: third-party insurance policy and comprehensive car insurance.
Third-party insurance is a type of insurance that covers the loss or damage caused to other vehicles in case of an accident while comprehensive car insurance policy is a type of insurance that covers the damages caused to both, third party and your own vehicle.
So, comprehensive car insurance or third-party insurance - still confused which one is more apt for you? Read on to know about these policies in detail:
Third-party Insurance
Third-party insurance is a type of insurance policy that protects you from legal liabilities that arises due to the involvement of your vehicle in an accident. Be it injury, death or disability or third party's property damage, your insurance compensates everything. As per the Motor Vehicles Act, it is mandatory to have a third-party insurance for your vehicle.
A few key benefits -
- Quick and easy to buy: You can easily purchase this policy either through the insurance company's office or from its website. Choosing an insurance policy online would be a convenient and hassle-free process.
- Affordable: Third-party insurance is cost-effective and economical. This insurance policy can easily be afforded by all due to lower premiums.
- It offers financial assistance: This insurance policy takes good care of the financial burden that arises due to an accident which causes damage to the third-party. However, neither the policyholder nor the insurance company are direct beneficiaries of the policy.
What's
covered
under
the
policy?
Here's
a
list
of
things
covered
under
third-party
insurance
policy
-
- Third-Party Legal Liability: An insurance company provides death compensation in case third-party loses his/her life due to an accident. This compensation to the victim is decided by the Motor Tribunal. And in case, third-party gets injured due to an accident, a third-party insurance for vehicle covers from major injuries to minor injuries.
- Personal Accident Cover: Damages or bodily injuries sustained by a vehicle's owner in an accident is covered under third-party insurance.
- Third-Party Property Damage: If the accident results in damage to the property, then compensation for the losses to the property are settled under third-party insurance policy cover.
What's not covered under the policy?
-
Loss
or
damage
caused
by
war,
invasion
or
war-like
operations
-
Liabilities
caused
by
radioactive
contamination
or
nuclear
weapons
-
Claims
that
arise
due
to
contractual
liability
-
Accidental
loss
or
damage
or
disabilities
are
borne
outside
a
particular
geographical
area
-
If
the
vehicle
was
driven
by
someone
who
isn't
a
designated
driver
or
owner
of
the
vehicle.
Why
choose
third-party
insurance?
Here's
why
you
need
to
choose
third-party
insurance
-
- Lower Premiums: Since only damages caused to the third party are covered under this policy, premiums in third-party insurance are lower as compared to comprehensive car insurance policy.
- No Stress: You don't need to worry about paying the repair bills of third-party change to third party property and third-party death/injury in case of an accident as third-party insurance takes care of everything.
Comprehensive Insurance
Comprehensive car insurance is a type of insurance policy that covers you for loss or damage caused to your own vehicle. Other than damages, this insurance policy helps you to cover damages caused to the third party.
Why
choose
comprehensive
car
insurance?
Here's
a
list
of
benefits
offered
by
a
comprehensive
car
insurance
-
- It's a hassle-free option: It offers peace of mind by saving you from a lot of stress in tough situations.
- It covers several instances: It covers everything right from fire, theft to liability to third-party in case of an accident.
- It is cost-effective: This policy is easily affordable. Comprehensive car insurance policy is cost-effective than a third-party insurance.
What's
covered
under
the
comprehensive
policy?
Here're
some
instances
that
are
covered
under
comprehensive
car
insurance
-
-
Theft
-
Road
Accident
-
Fire
-
Vandalism
-
Natural
Disasters
-
Civil
Disturbances
-
Damages
done
to
one's
car
by
wildlife
or
animals
-
Falling
objects
Having a third-party insurance won't cover you from any of these above-mentioned situations, thus it's good to opt for comprehensive car insurance.
What's
not
covered
under
the
policy?
Here's
a
list
of
instances
that
are
not
covered
under
a
comprehensive
policy.
These
exclusions
are
-
-
General
ageing,
wear
and
tear
-
Consequential
loss
-
Electrical
or
mechanical
breakdown
-
Damage
caused
due
to
driving
with
a
driving
license
-
Damage
caused
by
the
influence
of
narcotics
or
alcohol
-
Loss
or
damage
caused
outside
areas
mentioned
in
the
policy
document
Why
comprehensive
car
insurance
is
better
than
third-party
insurance?
Here's
why
comprehensive
car
insurance
is
better
than
third-party
insurance
-
- Expensive yet worth: A comprehensive car insurance may seem costly than a third-party insurance policy, but once you will compare the damages they cover, you can gauge that the difference in price is almost negligible.
- It covers your vehicle too: A third-party insurance policy does not cover the damages caused to your vehicle. In fact, all claims are made in favour of third-party. Although, a comprehensive car insurance policy covers your car too.
- It provides enhanced coverage: Buying just a third-party insurance cover can limit your coverage options. But, it's not the same with comprehensive car insurance policy as in case of comprehensive car insurance, you can also buy add-ons to enhance your coverage options.
As we can see clearly, when we compare both of the policies, each stands mighty in its own terms. Go for third-party insurance if you want to cover the damages caused to the other vehicle in case of an accident at your fault and with comprehensive car insurance if you are looking to cover the damages caused to both i.e., third-party vehicle and your own car.