First Party Car Insurance

First party car insurance is not a mandatory cover but a recommended one if you want to cover your car against own damages and third party liabilities. It offers all-round protection to the insured vehicle keeping you away from any financial distress resulting from it.

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Above-mentioned prices are for a 7-year-old Maruti WAGON R AVANCE LXI (998 CC) registered in Gurgaon and 15 days before expiry of previous policy

What is First Party Car Insurance?

First party car insurance aims to benefit the first party under a motor insurance policy. The first party refers to the person who purchases the insurance policy. Thus, a car owner is the first party under a motor insurance contract.

A first party car insurance policy provides coverage to the first party against own damages sustained by the insured car due to events such as natural disasters, vandalism, accidents, fire, etc. It also covers third party liabilities, such as death, injury and property damage of a third party, arising out of an accident of the insured vehicle. 

Moreover, a 1st party insurance also offers a personal accident cover to the first party if he/she dies or suffers from a disability due to an accident while driving the insured vehicle.

Thus, a first party car insurance comprises of a third party liability cover, own damages cover and a personal accident cover to the first party. It is also popularly known as comprehensive car insurance.

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Features & Benefits of First Party Car Insurance

The following are some features and benefits of purchasing first party insurance for your four-wheeler:

  • Covers Legally and Financially: A first party motor insurance policy covers a policyholder financially and legally. It fulfils the mandatory legal requirement by offering a third party liability cover and also offers a financial cover against own damages sustained by the insured car. 
  • Personal Accident Cover: Under this type of motor insurance policy, the first party is also entitled to a compulsory personal accident cover of Rs. 15 lakh to cover accidental death or disability of the driver/owner of the insured car. 
  • Additional Coverage: First party insurance coverage can also be enhanced by purchasing add-ons at an additional premium amount. 
  • NCB Benefit: With first party car insurance, a policyholder can also get the benefit of the No Claim Bonus NCB) reward for every claim-free year that can be used to get a discount on policy renewal.
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Difference Between First Party and Third Party Car Insurance

First party car insurance is different from third party motor insurance in the following ways:

Category First Party Car Insurance Third Party Car Insurance
Meaning A first party vehicle insurance policy provides coverage to the first party against third party liabilities and own damages. A third party liability insurance policy covers a policyholder against third part liabilities only.
Legal Mandate This cover is not mandatory under the motor laws. A third party insurance policy is a mandatory cover to ply on the roads of India.
Scope The scope of first party insurance extends to the first party and third party.  The scope of third party motor insurance is limited to only third party injuries and damages.
Additional Covers The coverage of first party insurance can also be enhanced by additional covers. Additional covers are not offered under liability only car insurance. 
Premium Amount The 1st party car insurance price is high as it offers wider coverage. When compared to 1st party insurance, the premium amount of third party insurance is lower. 
Claim Settlement Beneficiary Under first party insurance claim settlement, the final claimant to receive compensation is the first party or the car owner. The claimant under third party insurance is the third party that has sustained damages due to the insured vehicle.

Coverage Under First-Party Car Insurance

  • Third Party Damages: Damages arising out of third party liabilities, such as third party death, bodily injuries and property damages
  • Manmade Acts: Any damage to the insured vehicle due to strikes, riots or any manmade disasters
  • Theft: Any loss or damage to the insured car due to theft, housebreaking or burglary
  • Fire: Total or partial loss of the insured car due to fire, self-ignition or explosion
  • In-transit Damages: Damages sustained by the insured vehicle while it was in transit via water, land or air.
  • Natural Disasters: Any damage sustained by the insured vehicle due to a natural disaster like cyclone, earthquake, flood, etc.
  • Accidents: Any loss or damages due to an accident of the insured car
  • Breakdown: Damages arising out of the mechanical or electrical breakdown of the insured car
  • Drunk Driving: Any damage sustained by the insured car when the driver was under the influence of alcohol or drugs
  • Invalid Driving License: Any damage caused to the insured vehicle when the driver was not carrying a valid driving license
  • Outside Geographical Area: Damages sustained by the insured car outside the geographical scope of the first party motor insurance policy
  • Limitations to Use: Losses to the insured vehicle when being driven for other purposes, such as a private vehicle being used for commercial purpose
  • Gradual Wear and Tear: Any gradual wear and tear of the insured vehicle due to frequent usage or ageing
  • War: Any damage to the insured vehicle arising out of civil war or a nuclear peril

How to Buy/Renew First Party Car Insurance?

Purchase or renew your 1st party car insurance policy from Policybazaar.com by following these steps:

  • Visit the ‘Car Insurance’ page by heading to the ‘Insurance Products’ menu. 
  • In the given form, select the ‘Proceed without a car number’ or the “Brand New Car’ option. 
  • If you are renewing your car policy, enter your car number in the given form.
  • Select the RTO, model, variant, fuel type and registration year of your vehicle
  • Fill in the required details, your policy expiry date and previous claim details if any
  • You will now see a list of first party insurance plans for your car. Select the one along with any add-ons that you wish to buy. 
  • Enter your previous policy No Claim Bonus discount 
  • Fill in the proposal form and proceed with premium payment 
  • Pay the first party car insurance price online via Net Banking, Debit/credit card or UPI 
  • After the payment is complete, you will receive your 1st party car insurance policy documents along with confirmation at your email id.
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How to File a Claim Under First Party Car Insurance?

To raise a claim under your first party motor insurance policy, follow the steps given below:

  • Register a Claim: The first step is to inform the insurance company soon after the incident so that they can register a claim under first party insurance.
  • Vehicle Inspection: The company will then send a surveyor to assess the damages caused to the insured car
  • Documents Verification: The surveyor will also ask for some documents for claim verification. Make sure to keep these documents with you for the verification process.
  • Claim Settlement: The insured vehicle will then be sent to the network garage for repairs and the claim amount will be settled with the insurance company.
  • Reimbursement Claim: If the repairs have been done in a non-authorized network garage, the claim amount will be reimbursed to you after the repairs are complete and you have paid the bill.

FAQs

  • Q1. Is first party insurance mandatory?

    Ans:No. A first party car insurance policy is not a mandatory cover as per the motor laws of India. However, if you want to cover your car against own damages as well, you can purchase first party insurance for your four-wheeler.

  • Q2. What is the meaning of TP in car insurance?

    Ans:TP refers to the third party in motor insurance terms. The third party is the individual who suffers from injuries, death or property damage caused by the first party’s car. To cover your third party liabilities, the insurer will pay compensation to the third party who has incurred such losses on your behalf.

  • Q3. Which insurance is best: first-party or third party?

    Ans:A third party insurance policy is a mandatory cover for Indian car owners that covers damages sustained by a third party. It is limited in extent as it excludes own damages cover. On the other hand, first party insurance covers both third party liabilities and damages sustained by the insured car. This car policy offers a broader coverage and thus, is recommended by experts. However, choosing one out of the two completely depends on the requirements and budget of a policyholder.

  • Q4. What documents are required to raise a claim under a 1st party car insurance policy?

    Ans:To raise a claim under a first party four-wheeler insurance policy, you will need the following documents:

    • Duly signed claim form
    • Car policy papers
    • Copy of Police FIR
    • Repair estimates and bills
    • Copy of registration certificate
  • Q5. How can I reduce my first party insurance price?

    Ans: Follow the tips given below to reduce the first party insurance price of your car:

    • Retain your NCB reward
    • Install anti-theft device 
    • Compare first party insurance rates online
    • Avoid buying unnecessary add-ons
    • Raise your voluntary deductibles

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