5 min read
Updated on Sep 05, 2023
Keeping in mind the increasing number of accidents that Indian roads experience in a day, there are some strict rules laid by the Motor Vehicle Act of India. One such rule is to have a valid car insurance policy for your vehicle. Now, there are two types of motor insurance offered by the general insurance companies, one is third-party insurance and the other one is a comprehensive policy.
According to the Indian government, it is mandatory to have at least third-party insurance done for your vehicle in the interest of a third person if he/she gets injured by your vehicle.
The question is “what is third party insurance?”. A third-party insurance policy is a mandatory motor insurance policy for you to have before driving on the Indian roads. In case your vehicle injures a person, causes his death, or damages anyone’s property, you become liable to pay for their expenses. This is wherein third-party insurance comes in and pays the financial liabilities on your behalf.
Let me now explain comprehensive insurance. Comprehensive meaning is overall or complete, so a comprehensive motor insurance policy includes all the benefits of a third-party insurance policy along with extended coverage for the owner’s own damage. This is a comprehensive type of motor insurance policy that comes with several benefits like add-on features and therefore, is preferred by most vehicle owners.
Comprehensive insurance meaning an overall coverage of own damage of the vehicle along with third-party legal liabilities. Here are the benefits of the same:
|Third-party insurance||Comprehensive motor insurance|
|Coverage||Offers financial coverage on your behalf if your vehicle has damaged someone’s property, injured the person, or caused the death||Along with the third-party liability coverage, it offers compensation for your own damages, caused to your vehicle due to fire, theft or any other reasons|
|Add-on facility||Not available||Available|
|Premiums||Available at lower premiums due to the lesser coverage||Demands higher premiums due to the extended coverage offered|
|Discounts||No discounts are applicable||Discounts are offered by the insurance providers in the form of no-claim bonuses and voluntary deductibles|
|Profitability||Profitable for your pocket in case of damages caused to others||Protects your vehicle apart from handling third-party liabilities, also offers added benefits|
|Claims payable||The insurance company is liable to pay an amount decided by the motor accidents authority, on behalf of the owner.||
The company is liable to pay compensation to the owner depending on the type of policy, IDV of the vehicle.
In third-party liability cover the company is liable to pay an amount decided by the authority on the behalf of the owner.
|Limitations||Provides coverage only for other’s loss||Provides extended coverage but is expensive in comparison to third-party plans|
After reading about the similarities and differences between comprehensive and third-party insurance you must have understood more about them. However, these points will help you select the right plan if you are still confused;
It is important to follow the rules and regulations set by the Motor Authority of India to save yourself from any legal trouble. Understanding your requirements as an owner, estimating the frequency of usage of your vehicle, analyzing your driving skills, and checking the affordability of plans are the steps that should be followed before buying a motor insurance policy. Also thinking about unforeseen consequences and comparing the plans online can help you avail the best motor insurance for your vehicle.
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