Comprehensive vs Third Party Insurance
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Home / Car Insurance / Difference Between Comprehensive and Third-Party Insurance
Comprehensive vs Third Party Insurance
When it comes to Car Insurance, there are two popular options for you to choose from - Third-party Insurance and Comprehensive Car Insurance.
What is Comprehensive Car Insurance?
Comprehensive insurance is an optional insurance plan that provides third-party liability and own-damage coverage. This insurance plan provides financial protection against third-party life/property damages and vehicle damages due to accidents, natural disasters, theft, etc.
What is a Third-Party Car Insurance?
As per The Motor Vehicles Act, third-party car insurance is mandatory while driving a vehicle in India. It reimburses the third-parties for losses/damages caused by the insured four-wheeler. Third-party Car Insurance is the most basic and compulsory insurance plan for your car. It provides financial and legal assistance if you injure a third party or damage their vehicle/property. For example, if your car was involved in an accident that damaged a third party’s car, this plan shall cover their repair cost.
The following table will differentiate the two policies which will help you select the policy that is best suited to your requirements.
Difference Between Comprehensive and Third Party Insurance
The main difference between comprehensive and third-party insurance is the coverage. While third-party insurance protects only against damages to others, comprehensive insurance covers own vehicle damage and third-party liabilities. Choosing the right plan depends on your needs and budget.
PARAMETER | THIRD-PARTY LIABILITY COVER | COMPREHENSIVE COVER |
|---|---|---|
Meaning | A mandatory car insurance policy to cover third-party liabilities and comply with the law. | A car insurance policy that offers enhanced coverage in the form of Own Damage Insurance Cover. It also includes the cover offered by the third-party liability plan. |
Add-on Availability | No | Yes |
Compulsion | This is compulsory. | This is not compulsory. |
Coverage | 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 man-made or natural calamities, fire, etc. are also covered for your car. |
Is It Enough? | No, as the insured car is still exposed to ‘Own Damage’ risks. | Yes, as this is a comprehensive policy and can be customised with add-ons. |
Premium | This is priced lower due to its limited coverage. | The cost of this car insurance policy is higher due to its wider coverage. |
Rates | The cost of a Third-Party Car Insurance Policy is fixed by the Insurance Regulatory and Development Authority of India (IRDAI) based on the car engine’s cubic capacity. | The cost of this policy is fixed by the insurer as per the terms and conditions of the policy. |
Discounts | No discounts are available. | Discounts in the form of anti-theft devices, voluntary deducibles, and no-claim bonus are available. |
Benefits of Buying a Comprehensive Car Insurance
Here are the top benefits of purchasing a Comprehensive Cover for your four-wheeler.
1. Own Damage Cover
A comprehensive car insurance policy not just financially cover you against damages caused by your car to another person or their property. It also covers damages to the insured car under circumstances like fire, theft, accident, riots, or natural calamities.
2. Add-ons
If you opt for a Comprehensive Insurance Plan, you can customize the plan with car insurance add-ons. You can choose from a host of beneficial add-on covers such as the Zero Depreciation, Roadside Assistance, Engine Protection, etc.
3. Law-abiding Citizen
You shall be considered a law-abiding citizen concerning the mandatory car insurance requirement. This is because the Comprehensive Car Insurance Policy includes the coverage for third-party liabilities (mandatory) as well as Own Damages.
Exclusions in a Comprehensive Car Insurance
There are situations where you cannot demand the insurer to settle the claim. Exclusions are mentioned in the respective insurance plan’s Policy Wordings. Note that there might be slight variations in the list of exclusions stated by different insurers. Thus, study the exclusions carefully before buying the policy and making a claim application. Here’s a list of top exclusions under comprehensive insurance.
The Comprehensive Plan will not cover instances if the policy had expired at the time of the occurrence.
The Comprehensive Plan will not cover instances if traffic rules were not followed.
The Comprehensive Plan will not cover instances in case of fraudulent activities conducted by the applicant.
The Comprehensive Plan will not cover instances where Consequential Damages are concerned.
This plan will not cover instances mentioned under add-on coverage if the respective add-ons were not purchased by the policyholder.
It does not include Personal Accident Cover, which mandatory by law and covers both permanent disability/death of the person while driving a car.
Exclusions in a Third-Party Car Insurance
Here is a list of exclusions of a Third-party Car Insurance Policy. You can go through the entire list of exclusions by reading the Policy Wordings.
No vehicle insurance cover for damages to the insured car.
No vehicle insurance cover for Personal Accident.
No vehicle insurance cover for an expired policy.
No vehicle insurance cover if traffic and other rules are not followed.
No vehicle insurance cover if proper documentation is not submitted during a car insurance claim.
No vehicle insurance cover for violating the terms and conditions of the policy.
Why Should You Buy a Comprehensive Insurance For Your Car?
Here are the top advantages of choosing a Comprehensive Car Insurance Plan over a Third-party Car Insurance Plan.
1. Covers Own Damages
This cover will come in handy in case of losses due to natural calamities, theft, riots, accidents, etc. With this cover, the insurance company will pay for the bulk of the damages. In the absence of this cover, you will have to pay the entire repair bill from your pocket, which can result in depletion of savings.
2. Mandatory Coverage
Do not worry about monetary penalties for not complying with the law concerning buying Third-party Liability Cover. This plan includes mandatory coverage. Thus, by buying this cover, you abide by the law as well as insure your car against damages to third parties.
3. Pick the Insured Declared Value (IDV)
Here, you have the option to pick your vehicle’s IDV. This is the amount your insurer is liable to pay the policyholder where the insured vehicle is damaged beyond repair or is stolen. You can reduce the premium by selecting a lower IDV. However, this will also result in lower claims pay-out in case of a total loss.
4. Flexibility
It is not like if you have purchased a Comprehensive Plan, then you must stick with it. If you feel you are not comfortable with the plan, you can change it while renewing the policy. You can also switch the insurance company.
Benefits of Buying Car Insurance Policy on ACKO
You can buy a car insurance policy online, through an agent, or by visiting the branch. However, buying insurance online is the most convenient and easy way to insure your car. Here are a few benefits of buying an online car insurance policy on ACKO.
1. Save Time
You can compare and buy a car insurance policy anytime and anywhere in just 5 minutes by visiting www.acko.com or downloading our mobile app.
2. No Paperwork
Unlike in the offline method, you don't need to go through the tedious paperwork process that takes a lot of effort and time. With our robust digital infrastructure, you can get your policy in a jiffy.
3. Maximise Savings
When you buy online on ACKO, there are no agents involved. Thus, you can buy a policy at a lucrative price, which helps you save money while buying insurance for your car.
How to Select the Best Insurance Policy for You?
Here are a few things to consider while selecting the right car insurance policy for you.
1. Understand Your Requirement
Figure out your insurance requirements and match the cover that meets them. For instance, if you reside in a location that is prone to floods, selecting a Comprehensive Plan with an Engine Cover add-on is a good deal.
2. Age and Usage of the Car
If you have just purchased a new car, the combination of a Comprehensive Plan and a Zero Depreciation Cover is ideal. On the other hand, if you do not use your car much and are not worried about paying for the repairs, you can choose the minimalistic Third-party Car Insurance.
3. Fine Print
Go through the fine print of the policy documents carefully. During a claim, it will be beneficial if you are aware of the inclusions & exclusions along with the terms and conditions of the policy.
4. Right Insurer
Choose an insurance cover that provides the best price for your car insurance policy. Your insurer should also provide value-added services (instant pickup, free doorstep delivery) that are useful in times of need.
Key Takeaways
Here a few important things to remember while buying a car insurance policy.
1. Select Wisely
You have a choice when it comes to picking the type of car insurance policy.
2. Follow the Law
It is a must to buy at least a Third-party Liability Cover for your four-wheeler.
3. Use of Add-ons
You can buy add-ons only with a Comprehensive Plan. However, adding them will increase the premium amount.
4. Validity
Insurance plans are usually for a year after which you can select a different cover or an insurer.
Car Insurance Frequently Asked Questions
Here are some frequently asked questions in case you need further help in understanding the difference between a Third-party Plan and a Comprehensive Cover.
FAQs on Comprehensive Vs Third-Party Insurance
Why is buying Comprehensive Car Insurance a smarter choice?
Buying Comprehensive Car Insurance is a smarter choice because it offers the dual benefit of third-party coverage as well as Own Damage cover. Plus, you can choose add-ons that will further enhance the scope of your insurance policy.
Can I switch from a Third-party Policy to a Comprehensive Policy on renewal?
Yes, you can change the type of your car insurance policy. Your car will be thoroughly inspected before your policy approval. So, just make sure to get those pre-existing dents on your car repaired before the inspection.
Why is comprehensive car insurance more expensive than third-party policy?
Comprehensive Car Insurance is more expensive than Third-party Policy because a Third-party car Insurance Policy covers only the damages caused to the third-party person or property. It offers the most basic coverage.
On the other hand, a Comprehensive Car Insurance Policy pays for the damages caused to your car along with compensating the third-party. This extended coverage makes Comprehensive Car Insurance more expensive than Third-party Policy.
FAQs on Comprehensive Insurance Plan
What are the best add-on covers for a Comprehensive Car Insurance Policy?
The best add-on covers for a comprehensive policy are:
Zero Depreciation
Key Replacement Cover
Outstation Emergency Cover
Return to Invoice Cover
No Claim Bonus Protect
Buying an add-on cover totally depends on your personal requirements. So, it is very important to assess them before choosing the right cover and not overspend on car insurance.
Will the insurance premium go up if I buy two add-ons with my comprehensive insurance cover?
Yes, each add-on comes at a cost. The more add-ons you include in your Comprehensive Cover, the higher will be the final payable premium.
FAQs on Third-Party Car Insurance Plan
Why is buying third-party car insurance mandatory in India?
Buying a Third-party Car Insurance Policy is mandatory in India as per The Motor Vehicles Act. It ensures that the third-parties involved in an accident involving your car will be compensated for the loss.
Can I choose the IDV in a Third-party Policy?
No, the concept of IDV does not apply in a Third-party Policy. IDV comes into the picture in case of own Damage, which is not offered by the Third-party Policy.
Is it legal if I drive a car with only a Third-party policy?
Yes. Buying at least a Third-party Car Insurance Policy is necessary if you want to avoid fines. However, opting only for a basic policy will expose you to financial liabilities if your car suffers damage.
What does a paid driver mean in car insurance and can I add a paid drive in a Third-party Car Insurance Policy?
The professional appointed to drive your car is a paid driver. You can add them to your car insurance policy. This will allow you to claim in case of major injuries to the driver. Yes, a paid driver can be added to a Third-party Car Insurance Policy under the Personal Accident Cover.
What are some major exclusions of Third-party Car Insurance?
Exclusions are situations that are not covered under your car insurance policy. Here is a list of some important exclusions of car insurance plans.
Any damage to your car is not covered under a Third-party Policy.
Misinformation
Fraudulent claims
Please go through your car insurance policy for a full list of exclusions.
FAQs on Car Insurance
Which is the least expensive car insurance plan?
A Third-party Liability Policy is the least expensive car insurance plan. It also provides the least amount of car insurance coverage to the car owner.
What types of car insurance plans are available at ACKO?
ACKO offers both types of car insurance plans — Third-party Liability Insurance and Comprehensive Car Insurance. Additionally, you will find specially customised plans like Zero Depreciation - Super Saver, Comprehensive - Super Saver, etc. These provide extensive coverage while saving some extra bucks.
What if there is a mistake in the policy emailed to me by the insurance company? Will I be required to purchase the policy again or is there a mechanism to rectify the mistake?
Usually, minor errors in the policy document can be rectified by a process called Policy Endorsement. You must inform the insurer about the mistake and they will rectify it and send a new policy document.
I drive slowly, follow traffic rules, and have never been involved in a car accident. Do I still need to buy car insurance?
You need to buy car insurance irrespective of how good you are behind the steering wheel. The compulsory aspect of a car insurance policy has more to do with covering third-party liabilities. For exhaustive coverage, you can buy a Comprehensive Plan.
What is an example of fraudulent activity while claiming car insurance?
Raising a claim to make a profit from the insurance company is considered as a fraudulent activity. For policyholders, insurance is for reducing losses and not maximising profit.
Explore More on Car Insurance
Need More Help?
Have queries related to ACKO’s two wheeler insurance policy? Refer to our Policy Wordings for detailed information or reach out to us via email or phone using the information below
Email
Write to us at [email protected]
Phone
Call us on 1800 266 2256
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