Should One Buy Comprehensive Insurance or Third Party Coverage for their Car?

While it is legally required for every motor vehicle to have atleast a Third Party insurance cover, most pundits will tell you that it is advisable to have a Comprehensive Cover for your car, especially for the first 5-6 years of it’s life. Let’s look at both options for you:

Comprehensive Policy

As the name suggests, this policy offers overall and comprehensive protection against damages to both parties involved in an accident. This policy coverage is exhaustive, and it covers damages to car, theft, legal liability to third-party, and personal accident cover. The policy coverage can be further improved by opting for add-ons like accessories cover, engine protector, zero depreciation cover, medical expenses, etc. This coverage is highly popular since it offers end-to-end coverage and hence ensures less stress for the policyholder. Without a comprehensive insurance cover, the insured risks paying expensive repairs or damages following an accident from their pocket. Same is the case if the car is stolen, the insured will lose their investment while purchasing the car. Comprehensive car insurance in India is often costlier than standalone third-party insurance cover. However, it provides a lot more benefits to the insured compared to standalone third-party covers. Comprehensive car insurance often includes coverage for: theft, fire, natural disasters like a hurricane or a tornado, vandalism, falling objects, Damage done to your car by animals, civil disturbance, like a riot that results in damage or destruction of your car.
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Features of Comprehensive Insurance Policy
  • Complete protection for the vehicle including Accidents & Theft
  • Protection against damage from accidents even if the insured driver is at fault
  • One can purchase additional riders (add-ons) to enhance the insurance cover and ensure wide range of coverage options
  • It also includes the accidental property and bodily damages to the third-party
  • Damage due to Natural and Manmade disasters are covered by the policy
Exclusions under the Comprehensive Cover?
Comprehensive auto insurance offers maximum coverage to the insured. However, there are certain exclusions, which one should be aware of these exclusions so that there will be no surprises while making a claim under the policy:
  • Normal Wear and Tear of the vehicle
  • Breakdown of Mechanical and Electrical parts
  • Damage to Tyres and Tubes of the vehicle (50% coverage if damage is due to an accident)
  • Damage to the vehicle while being by an individual under the influence of drugs or alcohol, or driven by an unlicensed driver
  • Damage due to War or Nuclear Attack

Third-Party Policy

This is the most basic car insurance plan that only covers for damages and losses your car could cause to any third-party person, vehicle or erson. A third-party liability cover is made mandatory in India under the Motor Vehicles Act, 1988. It only offers coverage for third-party damages and losses such as if due to an accident or collision, you hurt a third-party person, his/her vehicle or a third-party property. Additionally, it also includes a personal accident cover to protect you from personal injuries or death. It protects you in case you accidentally hurt somebody on the road, or damage one’s vehicle/property. This way, you know you don’t have to dent your pocket in the case of such incidents. It doesn’t cover for damages to your own car (OD – Own Damage). No customizations are possible under this car insurance plan. This is Cheaper than a comprehensive car insurance policy, the premium price here is predetermined by the IRDAI based on the Cubic Capacity (CC) of your car. If you are currently driving a very old car, or you rarely drive then maybe having a basic third-party insurance would be sufficient for you. Third-party car insurance offers cover against any legal liability to a third party caused when you are at fault. It covers any damage or injury caused by the insured, to another person or property.. There is no specific limit on the liability coverage for injuries or death of a third party. However, liability coverage for property damages sustained by a third party is capped at Rs.7.5 lakh.

Features of Third-Party Car Insurance Policy
  • Affordable – It is the cheapest policy in the market by covering third-party liability only when compared to a comprehensive cover
  • Covers Bodily Injury, Death and Property Damage of the third party
  • Does not Cover Own Vehicle Damage (OD) - The drawback of the policy is that it will not cover the own vehicle damage. The bodily injuries or death of the driver or passengers will not be covered by the plan unless additional riders are subscribed by the policyholder.
  Comprehensive Cover Third Party Cover
Own Damages/Losses due to an accident are covered ×
Theft of your car ×
Extra protection by option for Add-ons ×
Damages/Losses to own car in case of fire, theft, Natural Calamity ×
Damages to Third-Party Bodily Injury and Property Damage
Personal Accident Cover
Injuries/Death of a Third-Party Person
Customize your IDV ×

Reasons to Upgrade to a Comprehensive Car Insurance

  • To Cover for Damages to Own Vehicle (OD) : Get covered for your own car’s damages and losses that could arise due to unforeseen circumstances such as accidents, collisions, monsoon floods, fire, et al.
  • Access to purchase Add-ons for additional coverage.. Opting for breakdown assistance/roadside assistance in your policy gives you the benefit of asking for our help for matters both big and small. Similarly, opting for a zero-depreciation cover ensures we don’t deduct your car's chargeable depreciation during claims.
  • You can Customize your IDV : Under our comprehensive car insurance policy, you also have the option to customize your car’s IDV.
  • To Cover for Third-Party Liabilities too : Also get covered for all third-party related liabilities such as if you hit and damage someone’s vehicle, injure a third-party person or damage someone’s property.
  • Personal Accident Cover Included : With a comprehensive car insurance policy, you don’t need to separately opt for a personal accident cover as a comprehensive policy automatically covers for it all.

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