Buying the right type of motor insurance policy is super important in India. If nothing, you should carry a basic motor insurance plan that offers third-party coverage, to have the least. Third-party insurance policy is mandatory in India and thus, it seems like an instant action plan to splurge on it but then comes safeguarding your vehicle against its own damages such as road accidents, natural disasters, theft etc. In order to help you decide what’s best for you, we have brought you a comparison between two major types of vehicle insurance policy: third-party insurance and comprehensive insurance policy.
Comprehensive Insurance Cover Vs. Third-Party Insurance Cover
Third-Party Insurance Policy
As per the Motor Vehicle Act, 1988 third-party vehicle insurance policy is a must in India. This type of insurance policy takes care of any third-party financial liabilities. If your vehicle has caused damage to any third-party property, driver or pedestrian and any legal penalties. If you are not opting for a comprehensive vehicle insurance policy then the basic plan you should go for is this.
Benefits of Third-Party Insurance Policy
Here is one thing: You do not want to cause trouble to someone’s car or a pedestrian and end up seeking a lawyer. But life is uncertain and the worst case scenario we can take is that it is not a good day and you become liable to pay for the third-party car damages or medical bills. In this case, third-party car insurance can save you from any financial liabilities and legal repercussions.
Here are the benefits of third-party vehicle insurance policy:
- Helps You Avoid Legal Penalties
Causing damage to any third-party property or person comes with legal consequences. When you have a third-party vehicle insurance policy, you ensure a deal of protection from any legal penalties and fees.
- Covers Your Third-Party Financial Liabilities
Third-party vehicle insurance provides financial coverage when you are liable to pay for any repair bills for third-party vehicle damage and medical expenses in case of any bodily injuries to a third-party person.
- Saves You From Violating Traffic Rules
Third-party vehicle insurance policy is mandated by law in India. Thus, getting your vehicle insured with it will save you from the violation of traffic rules and helps you prevent the cancellation of your driving licence.
Exclusions in Third-Party Vehicle Insurance Policy
Now that you have understood what a third-party vehicle insurance policy is about and what all that it covers, it is time to make a note of all that it doesn’t.
Here are the exclusions in third-party vehicle insurance policy:
- Damages Suffered by Your Vehicle or You
This one is pretty clear. Isn’t it? Since third-party insurance policy is only to cover the third-party damages, you cannot claim any coverage for your own damages using it.
- Driving without a Valid Driving Licence
If you have made a claim towards an accident where you were driving without a valid driving licence, it will not be settled.
|Points||Third Party Insurance||Comprehensive Insurance|
|Compulsion||It mandatory buy low||Not mandatory|
|Availability Of Add-on Covers||No add-on covers can opt with it||A number of useful Add-ons can be bought with this type. covers are such as Zero Depreciation Cover, Engine Cover, NCB Protection, etc can be availed against an extra premium.|
|Coverage Extent||It covers the damages caused to another individual or their property due to the insured car.||In addition to third-party liability coverages, theft, damage from calamities, fire, etc. are also covered for your car.|
|Cost||Relatively cheaper than a comprehensive policy||Relatively cheaper than a comprehensive policy|
Comprehensive Insurance Policy
Comprehensive insurance policy is probably the best type of car insurance policies. This car insurance policy is composed of both third-party coverage as well as own damage coverage that is a platter of increased protection and a bountiful of advantages.
Benefits of Comprehensive Insurance Policy
Buying a comprehensive insurance policy is a thoughtful plan which you can ever invest in for the sake of your vehicle. To say the least, it is a package plan with a multitude of benefits that adds value to your money by giving your vehicle manifolds of protective layers to combat the uncertainties.
Here are the noteworthy benefits of comprehensive insurance policy:
- Protects Your Car
Comprehensive vehicle insurance policy offers coverage to the damages incurred by your own car. At an unfortunate time when your vehicle has bumped into accidental damage, you can treat it with cover provided by comprehensive policy which brings financial relief for the repair/replacement of vehicle parts.
- Covers Third-Party Liabilities
The reason why comprehensive vehicle insurance policy is preferred to a large extent is because it cushions you with not only own damage protection but also third-party liability coverage which is mandatory in India. It covers third-party financial liabilities such as property damage, injuries to third-party persons and legal repercussions such as lawyer fees etc.
- Allows You to Opt for Add-Ons
Add-ons are the benefits that offer additional protection to the vehicle which a policyholder has to pay extra premium for. If you are buying a comprehensive insurance policy, you can opt for the add-ons such as no roadside assistance cover, engine protection etc. that are not covered in a standard policy. By purchasing these add-ons, you widen the scope of security for your vehicle.
- Offers Effective Cost
If you compare it with the third-party insurance policy, the premium rate of comprehensive vehicle insurance policy is higher but then, it is also cost effective. This type of vehicle insurance policy comes with a bucketful of advantages which makes its premium worthwhile.
- Compensates Against Theft, Fire or Explosion
Apart from accidental damages and third-party liabilities, comprehensive insurance policy compensates for the vehicle loss/damage due to the events such as theft, fire or explosion that snatch away your possessions in the worst way possible.
- Helps Avoid Depreciation
Since the value of a vehicle is depreciated every year, you cannot bear the whole fruit on your car. But here is the relief: with a zero-depreciation add-on cover with comprehensive policy, you can claim the settlement amount by avoiding depreciation of the parts of your vehicle.
Exclusions in Comprehensive Vehicle Insurance Policy
If your negligence has contributed to the damage/loss of your car then know, your claim towards any such accident will not be settled. There are few checkpoints on exclusions that you should know of when buying a comprehensive policy.
Here are the exclusions in comprehensive vehicle insurance policy:
- Drink and Drive
Any claim settlement towards an accident which took place when you were driving the vehicle under the influence of alcohol consumption will not be accepted.
- Driving without a Valid Driving Licence
If you were driving without your valid driving licence by your side, the claim towards the damage will not be accepted in that case.
- Driving without the Licence Holder
If your vehicle was being driven by someone other than you with a learner’s licence, the claim will be rejected.
- Benefits of Additional Covers That are Not Purchased
You will not be eligible to enjoy the additional benefits to cover damages if you have not made any purchase for them.
Know What You Need and Why You Need It
If your vehicle is old and you don’t drive it often then you can avoid buying the comprehensive insurance policy and can get your car insured with a third-party policy. On the other side, buying a comprehensive vehicle insurance policy is a great deal to have your vehicle protected against the multitude of damages that can occur unexpectedly. The type of policy you choose is determined by what you need and how much you are willing to spend on it.