What is Third Party Car Insurance?
A third-party car insurance provides coverage against any legal liability arising from injuries to a third party due to the insured car. It covers damages and injuries caused by the insured vehicle to a third-party person or property.
As per the Motor Vehicles Act of 1988, it is mandatory for every motor vehicle owner to buy at least third-party insurance coverage in India.
What Does Comprehensive Car Insurance Mean?
Also known as a Private package policy, full coverage car insurance, comprehensive insurance is an extensive car insurance policy that covers risks related to own damages sustained by the insured car. Understanding the comprehensive insurance meaning in the world of motor insurance is essential to ensure a broader protection of the vehicle.
A comprehensive car insurance policy provides optimal coverage against loss or damages caused to the insured car due to accidents, vandalism, fire, theft, manmade and natural calamities. This type of car insurance policy also covers accidental third-party property damages or physical injuries caused to the third person due to the insured motor vehicle.
The owner-driver of the insured car can also get a Personal Accident Cover of up to Rs. 15 Lakh under this policy. The comprehensive coverage can also be enhanced by selecting additional covers, such as engine protector, accessories cover, medical expenses, zero depreciation cover, etc. This cover is widely recommended, offering full-fledged coverage to the policyholder.
Which Car Insurance is Better: Comprehensive or Third-Party?
The major difference between comprehensive and third-party car insurance policies is the coverage offered. To help you learn how both the policies differ, here is the table:
| Parameters |
Comprehensive Car Insurance |
Third-Party Insurance |
| Coverage |
Comprehensive car insurance compensates for third-party liabilities along with any damage sustained by the insured car due to unforeseen incidents on the road. |
Third party insurance provides coverage against losses and damages caused to third-party property, person, or vehicle due to the insured car. |
| Mandatory |
Not mandatory as per the motor laws of India. |
To legally drive on the roads of India, it is mandatory to purchase this policy. |
| Benefits |
Protects both damages to third-party and to the own car. In addition, a No Claim Bonus (NCB) is also available every year at the time of policy renewal. |
Offers legal and financial coverage if you mistakenly hurt some third-party person, property, or vehicle on the road. |
| Limitations |
More expensive than third-party car insurance |
It does not cover the losses or damages sustained by the insured car. |
| Cost of Premium |
The premium is higher than third-party insurance but is based on many factors, like the make and model of your car, the city in which you are driving, and the riders you take. |
It is comparatively cheaper than comprehensive car insurance. The price of the premium is pre-determined by IRDAI as per the cubic capacity of the cars. |
| Customisation |
Lets you enhance your standard coverage by purchasing add-ons like NCB Protect, Zero Dep, etc. |
There is no scope for customisation. |
| Which to opt for? |
Although this policy is more expensive than third-party insurance, it offers extensive coverage and, hence, is more beneficial. Moreover, you can benefit from a No Claim Bonus if you do not make any claims in a policy year. |
If your car is very old or you are going to sell out your car very soon, or one of your cars is driven very rarely, then opting for a third-party insurance cover is recommended. |
What are the Benefits of Comprehensive Car Insurance?
When you buy a comprehensive car insurance plan for your four-wheeler, you get the following benefits:
- Own Damage Cover: A comprehensive car policy plan financially protects the insured car from accidental damages, theft, fire, etc.
- Customization with Add-ons: If you choose comprehensive car insurance, you can further enhance your policy coverage by opting for car insurance add-ons.
- Broader Protection: Opting for a comprehensive car insurance policy ensures that both you and your vehicle are financially & legally protected against damages and third party liabilities.
What is not Covered in Comprehensive Car Insurance?
Here are the factors that are excluded from the coverage of a comprehensive car insurance plan:
- Wear and tear and ageing of the motor vehicle
- Depreciation borne by the car
- Mechanical or electrical breakdown
- Damages caused to tubes and tyres. If the vehicle has got its tubes and tyres damaged because of an accident, then the insurance provider's liability would be restricted to 50 percent of the total replacement charges.
- Damages caused when driving the car without a valid driving licence
- Damages caused due to driving under the influence of intoxicants such as alcohol.
- Any loss or damage due to mutiny, war, or a nuclear attack
Exclusions in Third Party Car Insurance
Third-party insurance doesn't provide coverage for damages caused to the insured car in an unfortunate accident. Along with that, it won't provide coverage to your car or if your belongings are damaged or stolen. Moreover, you cannot enhance a third-party plan's coverage by purchasing add-ons.
Add-Ons Under Comprehensive Car Insurance
As stated above, you can also enhance your standard comprehensive insurance coverage by purchasing car insurance add-ons for an extra premium amount. Some of these add-ons include:
- Zero Depreciation Cover
- Roadside Assistance Cover
- NCB Protect Cover
- Consumables Cover
- Engine Protection Cover
