Comprehensive Car Insurance VS Third Party Car Insurance

Having a car insurance policy is a requirement for all car owners in India not just legally, but otherwise too. This insurance product was introduced in the market with a purpose to provide financial security and safety to people against damages and/or losses, incurred in accidents.

Even though purchasing car insurance is no guarantee that you and your vehicle will be safe from things like accidents or thefts, having one does provide you freedom from financial troubles that you face during such scenarios. Further, being monetarily secure also does relieve some of the mental stress that you face in those circumstances, to some extent.

Now, car insurance policies are of different types. In that regard, comprehensive and third party car insurance policies are the two types of motor insurance based on coverage, which are available in India.

Difference between Comprehensive and Third Party Car Insurances

Third party car insurance and what it covers

When driving a vehicle on public roads, you are as much liable for the security of other people and their properties as you are for yourself and your vehicle.  So if you were to hurt someone (unintentionally, of course) or damage their property while driving, you will not only be held responsible for the damage caused but will also have to make up for it.

Third party car insurance plans are made specifically to help you in cases where you cause damage/loss to other people or their properties when driving. A third party liability insurance pays for the injuries caused to a third party alongside damages to their property.

The coverage under a third party car insurance include –

Claim for injuries– Third party motor insurance shields you against claims made for injuries suffered in accident, by a third party. These injuries could be anything from bruises to fractures.

Partial disability–This motor insurance also offers compensation for partial disability (loss of function of a limb etc.) caused to third party, on your behalf.

Permanent total disability– If a third party faces permanent total disability, such as paralysis or loss of limbs, this will also be covered by your third party car insurance.

Death– In case of more serious accidents wherein a person loses his life, third party insurance will offer compensation for it.

Property damage– If your vehicle is insured with third party car insurance, then expenses for repairing the damage of a property owned by a third party, will be covered.

In all of this, it is important to know that third party liability insurance is obligatory for all motor vehicle owners in India, under the Motor Vehicles Act, 1988.

What does comprehensive car insurance mean and what does it cover?

Car accidents can be dangerously damaging.  There are various risks that someone getting involved in a car accident is exposed to. They could undergo serious bodily damages, like loss of a limb or the function of it, temporary or permanent disability which again could be partial or total, and death in the worst case scenario.

A comprehensive car insurance policy just like the name suggests is designed to provide an all-round coverage to the policyholder against losses and damages suffered in such accidents. It offers extensive coverage compared to any other motor insurance policy. It provides you financial security not just for physical injuries and damages but also for those incurred by your car in specific scenarios.

The common coverage offered by a comprehensive car insurance policy includes –

Natural disasters– A comprehensive car insurance policy offers coverage against damage or loss caused due to natural calamities such as flood, landslide, earthquake, hurricane, tornado, and hailstorm and so on.

Man-made reasons– Any damage caused to you or your vehicle when on road due to reasons such as vandalism, theft, terrorism or road rage will be compensated for under comprehensive car insurance.

Explosion, self-ignition and lightning– If your vehicle is damaged or lost owing to an explosion, lighting, fire or self-ignition, the expenses for the same shall be covered.

Transit by rail, road, water or air– In case your vehicle were to get damage amidst transportation via road, rail, air or water, your insurance company will cover for it.

Crash or collision–Damages caused during collision or car crash (by no fault of your own or otherwise) to you or your vehicle will be compensated under this policy.

Personal damages– When you are covered under a comprehensive car insurance policy, your insurance company is liable to pay for injuries, temporary/partial disability, loss of limb etc. that you may sustain (as specified in the policy).

Death– In the event of your death due to an accident, the insurance company shall offer death compensation.

Third party liability– Coverage against third party liabilities is an important inclusion of comprehensive car insurance policy.

Apart from the above, some of the best car insurance companies also offer road side assistance and coverage of cost of transportation as a part of their comprehensive car insurance policy,when your vehicle breaks down and cannot move.

What should you choose?

Comprehensive and third-party car insurance policies also differ in terms of the premium that needs to be paid to purchase them. Third-party car insurances are generally cheaper than comprehensive insurance plans for four wheelers.

However, you should not let the premium value define your choice.Buying a comprehensive plan makes a lot of sense as the coverage it provides is definitely much more than that of third-party. In other words, your preference of motor insurance plan must not be solely be based on the premium you have to pay, but also your needs.

So, let’s suppose you have an expensive car, the cost of repairing or replacing which can burn a hole in your pocket, you should opt for a comprehensive cover. But if you have an old vehicle or can take care of the basic vehicular expenses or are covered under some other insurance plan, a third party motor insurance might just be enough for you.

Whatever you decide, know that you must have an insurance cover for your vehicle. Given the availability of car insurance online these days, finding and purchasing a car insurance policy of your choice should not be a problem.