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Comprehensive vs Third Party Insurance | Bajaj MARKETS

Comprehensive vs Third Party Insurance - Know the Difference

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Introduction

When you wish to buy a car insurance plan for your new car, you need to first decide on the kind of cover you want to purchase. There are two main kinds of car insurance plans you can choose from - third-party car insurance and comprehensive car insurance. If you want to know which kind is right for you, it is essential to understand the difference between comprehensive and third party insurance plans.

What is Comprehensive Car Insurance?

To clear up the question of comprehensive insurance vs third party insurance, let us first take a closer look at what comprehensive coverage is all about. In case you are in an accident, your own car may suffer some damages. Additionally, your car may also injure someone else or damage their property.

 

A comprehensive car insurance plan covers the financial liabilities arising in both these scenarios. Your insurer will compensate you for the costs involved in repairing your own car, as well as the liabilities you own third parties for any injury or damage caused.

Advantages of Comprehensive Car Insurance

To fully understand the difference between comprehensive and third party insurance, you need to get a good idea of how each kind of cover can be beneficial. Let us see what the advantages of a comprehensive car insurance plan are.

 

  • Covers Damages to your Car

     

    A comprehensive car insurance plan covers the cost of repairing any damages that your car may suffer in an accident.

  • Third-Party Liabilities Covered

     

    This kind of car insurance also covers any liabilities you may incur towards third parties in case of any accident, such as an injury or a damage to another person’s property.

  • Personal Accident Cover

     

    Your comprehensive car insurance plan also covers any medical costs you may incur if you or your family members suffer any partial or permanent disability due to an accident.

  • Protection in Case of Theft

     

    A comprehensive car insurance plan also covers any loss or theft of your car. You can raise a claim if your car has been stolen.

  • Add-on Covers Available

     

    This is perhaps one of the biggest points of difference between comprehensive and third party insurance plans. Comprehensive car insurance plans, unlike third-party covers, can be customized with add-on covers that enhance the benefits offered.

 

Some common add-ons include the zero depreciation cover, the engine protection cover and the no-claim bonus (NCB) protection cover. You need to select these add-ons at the time of purchasing your comprehensive insurance plan.

Disadvantages of Comprehensive Car Insurance

A comprehensive car insurance plan, as its name indicates, covers most, if not all eventualities. However, it does come with some small limitations. Here is a preview of the disadvantages of comprehensive car insurance.

 

  • No Coverage for Regular Wear and Tear

     

    A comprehensive car insurance plan does not cover the costs of regular wear and tear that your car endures.

  • Higher Premiums

     

    The premiums for a comprehensive car insurance plan are higher than the costs of a third-party insurance plan. However, the benefits that a comprehensive plan offers are also higher and more holistic.

What is Third-Party Car Insurance?

To understand the difference between comprehensive and third party insurance, it is also important to comprehend each kind of insurance completely. You’ve seen what comprehensive car insurance is all about. Let’s now take a look at what third party car insurance is.

 

Third party car insurance is a mandatory cover required by the Motor Vehicles Act, 1988. It is a basic insurance plan that covers any third-party liabilities you may incur after an accident. So, if your car damages any other person’s property or injures another person, you need not compensate them out of your own pocket. Your insurance provider will cover these expenses.

Advantages of Third-Party Car Insurance

Despite being a basic protection plan, a third-party car insurance policy offers many benefits. Check out the top advantages of third-party car insurance below.

 

  • Legal Compliance

     

    A third-party cover is a legal requirement in India. By getting this kind of coverage, you can protect yourself from penalties, fines and/or imprisonment for not driving without a valid licence.

  • Liabilities Arising from Injuries

     

    If you accidentally injure another person with your car, the cost of compensating them for their medical treatment can be steep. Third-party car insurance ensures that your insurer compensates you for these costs.

  • Liabilities from Property Damage

     

    Additionally, even in case of any damage to third-party property, you need not pay for the repair costs out of pocket.

Disadvantages of Third-Party Car Insurance

Despite its many advantages, third-party car insurance also has some limitations. Here is a closer look at these drawbacks.

 

  • Compensation Only After Court Verdict

     

    In case of injuries to third parties or death caused by accidents, the insurer will compensate the victim on your behalf. However, this is only after the court has given its verdict. This may take a while.

  • Limit on Compensation in Some Cases

     

    In case of any damage caused to another person’s property, the limit on the compensation covered by a third-party cover is Rs. 7.5 lakhs.

  • No Coverage for Own Damages

     

    A third-party cover also does not cover any damages to your own car. So, in case you only have a third-party car insurance plan, you need to bear the expenses to repair your vehicle.

Difference between comprehensive and third party insurance

You now have a clear idea about what comprehensive car insurance and third-party car insurance are, and the pros and cons of both kinds of covers. In this section, we will take a closer look at the all-important question - what is the difference between comprehensive and third party insurance?

 

Here is a closer look at how these two kinds of insurance plans compare with one another.

Particulars

Third-party car insurance

Comprehensive car insurance

Coverage

Only damages or injuries caused to third parties are covered

All-round, wide-ranging protection from damages to your own car as well as third party liabilities

Premium rates

Relatively more affordable

Comes with a higher premium

Customisations

No customisation possible

Customisations available in the form of add-on covers such as zero depreciation cover, return to invoice cover and breakdown assistance etc.

This sums up the key points of difference between comprehensive and third party insurance plans.

Final Thought

Getting to know the difference between comprehensive and third-party car insurance plans for your car can help you make an informed decision about which kind of insurance plan to choose. No matter what choice you make, you can find a plan that suits your needs on Bajaj MARKETS. In addition to the options available, you can also enjoy the advantage of an easy online purchase process and a hassle-free claims process.

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FAQs on Difference Between Comprehensive and Third Party Insurance

  • ✔️Which is better - comprehensive or third party insurance?

     Both kinds of car insurance come with their own benefits. Third-party car insurance is more affordable, but only covers third-party liabilities. Comprehensive car insurance may come with a higher premium, but it offers a wide range of benefits.  

  • ✔️Does a third-party car insurance plan cover damages to my own car?

     No. A third-party car insurance policy only covers liabilities arising towards third parties. It does not cover damages to your own car, unlike a comprehensive car insurance plan.

  • ✔️Is a comprehensive car insurance plan mandatory in India?

     No. The Motor Vehicles Act, 1988, only makes third-party car insurance mandatory. However, comprehensive car insurance can protect you from many unexpected financial contingencies.  

  • ✔️What is the difference between third-party insurance and comprehensive insurance?

     A third-party car insurance plan only covers liabilities arising from any injury or damages to third parties or their property. A comprehensive car insurance plan also covers damages to your own car.

  • ✔️Does a comprehensive car insurance plan cover third-party liabilities?

     Yes, a comprehensive car insurance plan includes third-party coverage. So, in case your car is involved in an accident that injures another person or damages their property, your car insurance plan will cover these costs.