Choosing the right type of insurance for your vehicle in India is very important. This is because insurance is mandatory for third party coverage here and if you do not have such cover, you break the law. This can sometimes lead to the cancellation of your license.
There are two types of car insurance plans available in the market to avoid damages and fines due to minor accidents. These are – Comprehensive car insurance and Third party car insurance. It is important to understand the difference between these two insurances to know which one is better for you.
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What is comprehensive insurance?
It compensates for the damage caused by natural calamities like hurricane, earthquake, flood etc. It also gives protection against man-made calamities like theft, accident, dacoity, fire.
Engine protector, accessories cover, medical expense, zero depreciation cover etc. can also be taken to increase the coverage. It is a popular cover and keeps the policy holder worry free by providing complete coverage.
Benefits of buying comprehensive insurance
A comprehensive insurance plan protects your vehicle from the following:
Bad windshield such as glass damage
damage caused by a bird
Damage caused by objects falling from the sky such as missiles etc.
Damage caused by natural calamities like storm, storm, hail etc.
third party liability
If you do not have a comprehensive insurance plan, you cannot claim for any damage other than road accident.
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What is Excluded in Comprehensive Car Insurance?
The following factors are excluded from the coverage of a comprehensive insurance plan:
wear and tear of an aging automobile
mechanical or electrical failure
Tube and tire damage. If the tubes and tires of the vehicle are damaged in an accident, the insurance company will only compensate for 50% of the replacement.
Damage caused by an unlicensed driver
Damage caused by a drunk driver
Damage caused by war, riots or nuclear attack
third party car insurance plan
A third party car insurance plan provides protection against any legal liabilities when a third party has suffered a loss due to the fault of the holder. It covers all damages and injuries caused by the insured vehicle to third parties. According to the Motor Vehicles Act 1988, it is mandatory for every motor vehicle owner in India to purchase a third party insurance.
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Advantages of Third Party Insurance Plans
A third party insurance plan protects the vehicle owner from legal liabilities, damages or death caused to the third party from the insured vehicle. As per the Mohot Vehicles Act, a third party claim can be made under ‘No Fault Liability Claim’ in which the claimant does not have to provide proof of accident and faulty liability claim caused by the vehicle.
Excluded from third party insurance plans
A third party insurance plan does not cover damage to a vehicle and goods in the event of an accident. Plus, it doesn’t protect your tax from evasion or damaged goods.
Comprehensive Car Insurance Vs Third Party Car Insurance
Comprehensive car insurance and third party car insurance differ from each other in coverage and reason. The two are compared in the table given below which is best to understand the difference between them.
Comprehensive Car Insurance Third Party Car Insurance
Definition It gives coverage for you and your vehicle. It not only covers third party liability but also you and your vehicle. The most basic car insurance plan that covers damage and damage to your vehicle due to third party property, person or vehicle is a third party insurance plan.
Coverage Details This car insurance plan provides comprehensive coverage and protects your car and you from damages and damages caused by third parties. For example, if there is a flood in your city, a comprehensive insurance plan will cover your vehicle for that.
It only provides coverage for third parties. This means it protects you from damage and damage caused to any third party but this policy does not protect your car from any damage and damage. Along with this third party insurance protects you against death and injury due to personal accident.
Benefits This insurance plan gives protection against damages to third parties and to the vehicle. So you are protected from almost everything. Along with this, there is also a no claim bonus which you can avail at the time of renewal of the plan at the end of every year. This insurance protects you if you accidentally damage a third party person, architecture or vehicle on the road. So you don’t need to spend money out of your pocket in case of such an accident.
Limitations It is more expensive than third party insurance plans. It does not cover damages and damages caused to your vehicle.
Premium Amount The premium depends on many factors like make and model of the car, the city in which you drive and the type of rider you take but the premium will be higher than third party insurance.
It is cheaper than a comprehensive insurance plan. The premium is already decided by IRDI according to the cubic capacity of the vehicle.
Customization By customizing this plan you can add multiple riders as per your needs. There is no scope for customization in this.
Which should be taken This plan gives you wide coverage even after being expensive and hence it is more beneficial. Also, if you do not claim any in this, then you can also take no claim bonus.
If your car is very old or you drive it a lot, then you should get third party insurance.
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Difference between third party cover and comprehensive cover
The advantages and disadvantages of both these car insurance plans depend on many factors. After understanding these reasons, analyzing and comparing them, you should take your decision.
If the cost of your car is less then you should take third husband insurance as it can easily rectify the fault. Paying expensive repair bills is better than paying expensive premiums.
On the contrary, if your vehicle is new then you should take comprehensive insurance cover.
A third party insurance plan provides coverage against third party vehicle damage and third party injuries in an accident. Many insurance companies offer third party coverage for a little extra money. But it does not provide any coverage for damages to your vehicle.
If you are looking for coverage for your vehicle then you should go for a comprehensive plan. Its coverage is high and it also has third party coverage. Plan plan is costlier than third party plan as it gives better coverage.
Comprehensive insurance plan is costlier than third party as it provides coverage against injury, damage and theft.
A road accident unfortunately happens and your sari saves you in water. Every insurance b=company may have different exclusions and benefits but basically everything is the same. If you want peace of mind and the right insurance coverage for your vehicle then you should go for comprehensive car insurance as it will cover your insurance needs.