Understand the Difference between Comprehensive and Third-Party Car Insurance in India
Every car owner needs a car insurance policy. The motive may be to avoid hefty fines or to protect the car in adverse situations. But when you are going to buy a car insurance policy the jargon involved in the process may trouble you.
You may think “Damn! this is too complex, and I need an expert advice”. Because getting the right car insurance is a bit more involved in finding the best price, it is important that you get the right coverage for any probable situation.
So first, you need to understand what is available for you to buy. But don’t worry! We are here to help. We will simplify things and discuss the types of insurance here.
There are 2 types of car insurance policies in India:
- Comprehensive Car Insurance
- Third Party Car Insurance
What is Comprehensive Car Insurance policy?
Before we dive into the insurance terminologies let us understand what the meaning of the word “Comprehensive”. It means “dealing with all or nearly all elements”. So, in simple words, Comprehensive Car Insurance guarantees compensation for nearly all probable loss or damage to your car.
Specifically, comprehensive car insurance kicks in to cover losses that are totally out of your control. It covers you from losses due to any accident, collision, fire, theft, vandalism or damage caused by certain natural disasters. It also covers your third-party liability. Now if you feel “Third party liability” as a jargon alert, then please keep reading, we will discuss later here.
Benefits of Comprehensive Car Insurance
- Your car stays protected: The fundamental benefit of this policy is, it pays you the cost of repair for any damage to your car caused by man-made or natural catastrophe. As a result, you will be able to maintain a new shine on your car forever!
- Your bank balance stays protected: This helps to avoid unforeseen expenses that may screw your financial stats. Sometimes the cost of repair after an accident or in case of a theft the financial loss can be huge. But when you have a comprehensive car insurance, there is not much to worry about!
- You are protected from third-party liability: As promised earlier, we will discuss about the third party liability here. So liability coverage pays for the damage that you caused to someone innocent in an accident, when you are at fault. This falls under the coverage of the comprehensive policy as well.
- You are allowed to choose multiple add-ons: Now, what’s an add-on? 🤔! Add-ons are designed to provide extended protection when associated with a comprehensive policy. It simply muscles up the basic comprehensive coverage. For an example, if you dashed your Swift into a tree and shattered your headlight. If you buy a zero depreciation cover with the comprehensive policy, the depreciation value of your car will not be calculated during an actual claim. Is not that amazing! You you will get a new headlight for your swift without paying anything from your pocket. There are other add-ons like tyre protection, breakdown assistance, return to invoice and etc. You can explore them before you buy. But keep in mind that these add-ons come at their independent cost!
What is Third-party Car Insurance policy?
Third Party Car Insurance is the most common as it is mandatory to have a TP Cover to drive legally on Indian roads. This policy will pay for bodily injury and property damage of others when you are responsible for their loss. Remember that this policy will not cover any of your damages. It covers others from damage you caused and protects you financially.
Advantages of Third-party Car Insurance:
- Law abiding: It saves you from traffic penalties.
- Financial protection: Without this you could be on the hook for the entire cost of an accident out of your pocket.
- Legal Assistance: You can call for a representation at any Inquest or Fatal Inquiry in respect of any death.
Compare Comprehensive vs Third-party Car Insurance Policy:
|Damages Covered||Comprehensive plan||Third-party plan|
|Damages to own car due to accident||Covered||Not Covered|
|Damages to own car due to natural calamity, fire, vandalism or theft of car||Covered||Not Covered|
|IDV customization||Covered||Not Covered|
|Add-on customization||Covered||Not Covered|
|Injury/ death of third party||Covered||Covered|
|Third party property damage||Covered||Covered|
|Personal accident cover||Covered||Covered|
Which one should you buy? Third Party or Comprehensive Policy?
Well, solely it depends upon your requirements! Third party insurance is mandatory, so you can’t skip it. So the question is whether you should opt for a comprehensive policy or not, because comprehensive policy will have a higher premium against it as compared to stand alone TP policy.
Comprehensive policy is always suggested if you own a new or expensive vehicle or if you love your car!