Difference Between Own Damage and Third Party Car Insurance Policy

The foremost and undoubtedly the most crucial decision before buying insurance for your car – which type of policy would best suit your needs? Read on to know the differences between car own damage insurance and third-party car insurance.

You have just purchased the car of your dreams and the first thing you do is head out to the insurance company to buy car insurance. For, as per the Motor Vehicles Act, 1988, you would not be allowed to drive your car on the road without possessing car insurance first. Once you’re there at the insurance company, the next question arises before you – which motor insurance policy to buy? Your insurer would present you with two options – Own Damage Insurance Policy and Third-Party Car Insurance.

Now this is the most crucial and also the most challenging decision that you would make after buying a car. This is because the insurance that you purchase must adequately cover all future damages and costs associated with it. Here we discuss the major differences between the two basic car insurance policies – Own Damage and Third Party – to help you make an informed decision.

Third Party Car Insurance: Meaning

What is third party insurance meaning? As the name suggests, a third-party car insurance refers to the insurance policy which is exclusively designed to provide coverage against any loss incurred to a third-party person or property on account of the policyholder’s fault. In other words, if you go and accidentally hit another person or vehicle while driving your car, you need not bear its compensation by way of treatment (person) or repair (vehicle) cost. Your third-party car insurance policy would take care of it for you.

Now that we fairly understand the third party car insurance meaning, let us look at some of the top benefits of this policy for the insured.

Benefits of Third-Party Car Insurance

Buying a third-party car insurance for your four-wheeler can help you in the following ways:

1. The insurance policy provides adequate cost coverage for any medical treatment that needs to be done for a third-party individual affected by the accident.
2. Third-party insurance also covers death compensation in case of an unexpected and unfortunate demise of the third party in the accident.
3. All repair costs involved in the repair of any third-party property (such as vehicle) involved in the accident are paid for by third-party insurance.
4. All costs involved in any legal proceedings that may have to be carried out in case of hurt or damage caused to a third-party person/property are covered under third-party car insurance.

Note: You can easily buy third party car insurance online by visiting PayBima. The website offers some of the best deals on motor insurance for all your needs.

Own Damage Insurance for Car

Own damage car insurance policy is designed to provide financial coverage for any loss that the owner or insured of the vehicle incurs. This is in contrast to third-party car insurance which covers losses incurred to third-party people or property. A third party may or may not be involved in the mishap; regardless, own damage car insurance would cover losses for the insured.

Why Should You Buy Own Damage Car Insurance: Benefits of Car OD Insurance 

There are a  couple of advantages to buying own damage car insurance for your vehicle. These are:

• This insurance provides protection to the owner or insured against both natural (earthquake, flood) and man-made (theft, fire) disasters that may impact the vehicle.
• Financial coverage for accidents is provided to the owner’s car for any damage caused in the mishap.
• Own damage car insurance also provides the flexibility of including optional add-on riders to enhance the policy coverage.

What is Basic Own Damage Premium in Car Insurance?

Own damage premium primarily refers to the premium amount or the cost that the policyholder bears towards the maintenance of his/her own damage car insurance policy. This price is generally determined by the insurance company based on a couple of factors, such as the age of the vehicle, its make/model, type of vehicle, and the city that it is driven in.

Read More: How to Claim Car Insurance for Own Damage?

Car Own Damage vs Third Party Insurance: Difference Between Own Damage and Third Party Insurance

What is the difference between own damage and third party insurance? We saw above the meaning of own damage car insurance policy and also what third party insurance for a car stands for. Also, we looked at the prime benefits of buying each of the two policies for a car owner. While both have their own unique benefits, the decision as to which car insurance to buy can sometimes be quite overwhelming for the owner.

To help you make an informed choice, we present here the key differences between own damage and third-party car insurance policies in the following table:

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Summary

Buying third-party car insurance is mandated by law. However, whether or not you wish to buy an own damage insurance cover is purely a personal choice. Hope the information contained in this blog helps you make an informed decision regarding the same.

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