Comprehensive Vs Third Party Insurance

Comprehensive Vs Third Party Insurance FAQs

• Q1. What is the difference between third party and comprehensive insurance?

  Ans: Third-party car insurance is a standard and legally mandatory type of motor insurance. It only offers protection against damages caused to third-party person or property and does not cover damages incurred by the insured vehicle. On the other hand, a comprehensive insurance policy offers full coverage by covering both own-damages and third-party liabilities. Policyholders can further enhance a comprehensive policy by purchasing relevant add-ons.

• Q2. Why is purchasing comprehensive car insurance a smarter decision?

  Ans: Purchasing comprehensive car insurance is considered a smarter decision because it provides all the benefits you will require under a single insurance policy. It not only enables you to follow the law by providing coverage of third-party insurance but also helps to cover the damages or losses to your car and you.

• Q3. Why is comprehensive car insurance cost higher than third-party insurance?

  Ans: The reason for the higher cost of comprehensive cover is its vast inclusions. It covers third-party liability as well as offers own damage coverage. In addition, the comprehensive cover’s premium increases if you opt for add-ons like zero depreciation, breakdown assistance, gearbox and engine protection, etc.

• Q4. Is it possible to switch from a third-party car insurance policy to a comprehensive plan at renewal?

  Ans: Yes, switching from third-party insurance to a comprehensive policy at the time of car insurance renewal is possible.

• Q5. Is the driver covered under third-party insurance?

  Ans: A third-party car insurance will only cover damages incurred by the owner-driver if you have purchased the compulsory personal accident (CPA) cover. The IRDAI mandates all vehicle owners to have a personal accident cover which helps in case of unforeseen injuries, disabilities, and death of the driver.

• Q6. How does comprehensive car insurance work?

  Ans: Comprehensive car insurance acts as an absolute safety net for car owners by providing the mandatory third party coverage as well as protection for your own vehicle.

• Q7. Is comprehensive insurance full coverage?

  Ans: Yes. A comprehensive car policy is also known as full coverage car insurance or a bundled policy. It includes both own damage protection and third party liabilities.

• Q8. What will happen if I neither buy third party cover nor comprehensive car insurance?

  Ans: If you don’t buy a third party or comprehensive car policy, you cannot legally drive your car on Indian roads. This is because possessing at least third-party cover is mandatory for all car owners in India. If you are caught driving your car without either of the policies, you will be fined Rs. 2,000 for the first offence, Rs. 4,000 for the second offence, and imprisonment.

• Q9. How can I convert my third party car insurance into comprehensive insurance?

  Ans: You can convert your third party car insurance into a comprehensive policy at your renewal. Instead of renewing your third party policy, you can buy a comprehensive policy for your car. Make sure to buy the comprehensive policy before your existing third party insurance policy expires.

• Q10. Is comprehensive car insurance worth it for old cars?

  Ans: A comprehensive car insurance policy may be worthwhile for older vehicle if they remain in active use, particularly in urban areas where chances of accidental damage are higher because of dense traffic.

• Q11. Can I add zero depreciation cover to my third party car insurance policy?

  Ans: No. You cannot add zero depreciation cover to your third party car insurance policy as zero depreciation is add-on cover, and you can only buy it under a comprehensive policy.

• Q12. Should I opt for third party or comprehensive insurance if my car is 11 years old?

  Ans: If your car is 11 years old, opting for third party car insurance rather than comprehensive insurance is better. The value of your car has reduced manifolds over the years, and any loss or damage to the vehicle may not create a major loss. So, you can save a lot on your car insurance premium by opting for third-party liability coverage for your car.

• Q13. Does No Claim Bonus apply to comprehensive and third party car insurance?

  Ans: No. No claim bonus (NCB) only applies to comprehensive car insurance plans. If you don’t raise a claim under third party insurance, you won’t get any renewal benefit. However, if you do not raise a claim under a comprehensive policy, you will earn NCB, which can be used to reduce your renewal premium.