What is the difference between comprehensive and third party insurance?


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Updated on Aug 04, 2023

As soon as you get a car in India, you need to get an insurance policy for it too. When choosing motor insurance, you have the option to choose between a comprehensive plan and a third-party insurance plan. What are these plans and what are the differences between the two? Read on to get the answers.

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Comprehensive or First Party Car Insurance Meaning

The first part in car insurance refers to the owner of the car, who is also the policyholder. When you buy a comprehensive car insurance plan, the first-party cover is available. This means the damages incurred to your vehicle in an accident or theft will be covered.

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Third-Party Insurance Meaning

There are some exclusive third-party car insurance plans available in India. Here, only the damages incurred to a third party in an accident will be covered. The first party will not be covered.

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Difference between comprehensive and third party insurance

There are some very basic difference between 3rd party and comprehensive car insurance. They are:
1. Cover: There is a major difference in the list of covers. In a third-party plan, you only get compensated for damages to a toy vehicle/property and bodily damages to a third party. You also get legal compensation if you are taken to court by a third party following an accident. In a first-party plan, you get all the covers included in a third-party plan. Additionally, you get coverage for damages to your own car as well. Also, you get compensated if your car is damaged in a natural calamity, riot, etc or if it is stolen.

2. Price: A third-party car plan is cheaper than a first-party car plan. The covers are limited in the former hence the price is lower.

3. Flexibility: You cannot customize a 3rd party car insurance plan in any way. The coverage is fixed. A comprehensive plan, however, is more flexible and can be customized with riders.

4. Compulsion: It is legally compulsory for every vehicle owner to have a third-party vehicle insurance cover in India. There is no such compulsion to get a 1st party car insurance plan and the coverage is completely optional.

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Comprehensive Car Insurance vs Third Party

Now that you know what is third-party insurance and what is first-party insurance, you would be happy to know that both types are available online. You can easily buy comprehensive or third-party car insurance online instantly. This apart, both the types of plans offer a personal accident cover which proves to be very helpful.

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The Final Word

Make a list of your requirements and then choose a good type of car insurance plan. Whether you buy a comprehensive plan or a 3rd party vehicle insurance online, make sure you compare car insurance plan and locate the best policy. The same holds true for a comprehensive or third-party bike insurance policy. Motor insurance is very easy to get these days so go ahead and buy a plan right away.

Also read: Maintenance Tips to Keep Your Car in Good Condition

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FAQs on Difference between comprehensive and third party insurance

What is Comprehensive Insurance?

Comprehensive insurance is a type of auto insurance policy that provides coverage for damages to your car as well as to other people's cars, property, and injuries. It also covers theft and fire damage, vandalism, and weather-related incidents. Comprehensive insurance is optional but is often required by lenders if you are financing or leasing your vehicle.

What is Third-Party Insurance?

Third-party insurance is a type of auto insurance policy that provides coverage for damages and injuries that you may cause to other people's cars, property, and persons. It does not cover any damages or injuries to your own car. Third-party insurance is mandatory by law in most countries and is the minimum level of insurance required.

What are the main differences between Comprehensive and Third-Party Insurance?

The main difference between comprehensive and third-party insurance is the level of coverage they provide. Comprehensive insurance covers damages to your car as well as to others, while third-party insurance only covers damages and injuries to other people's cars, property, and persons. Comprehensive insurance is more expensive but offers more protection, while third-party insurance is cheaper but provides limited coverage.

When should I choose Comprehensive Insurance?

You should choose comprehensive insurance if you want to protect your own car against damages, theft, or loss. This is particularly important if you have a newer or more expensive car that would be costly to repair or replace.

When should I choose Third-Party Insurance?

You should choose third-party insurance if you have an older or less valuable car that you are willing to take the risk of repairing or replacing yourself. Third-party insurance is also a good option if you want to keep your insurance costs low and are comfortable with limited coverage.

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Sep 20, 2021
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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