Difference between Comprehensive Car Insurance & Third Party Car Insurance

Comprehensive Car insurance and third-party car insurance policies are the types of insurance policies that provide financial cover at the time of unforeseen accidents. The difference between these two types of policies is the kind of coverage they provide. A third-party insurance policy provides cover to the car owner against any loss or damage that has been caused to a third-party vehicle. A comprehensive car insurance policy provides cover for third-party as well as your own damages.

Having a car insurance plan in India is mandatory. As per the Motor Vehicle Act, 1988 car owners must have at least a third-party car insurance policy. If the car owner violates traffic rules and gets caught without a third-party car insurance policy then for violating the Motor Vehicle Act, 1988, the car owner will have to either pay a fine, go to jail or get their driving license disqualified for up to 3 months.

In order to protect yourself from any kind of fine or damages that could come up due to any unforeseen mishaps, it is important to understand the difference between both comprehensive car insurance and third-party car insurance policies and then decide which one suits your requirement.

Third-Party Car Insurance

A third-party car insurance policy is the basic car insurance policy. It is mandatory for the car owner to have a third-party car insurance policy. A third-party car insurance policy provides coverage to the owner only against third-party liabilities.

Benefits of Third-Party Car Insurance

Third-party car insurance provides coverage against any loss or damage caused to the car or the bodily injury to the passenger. Here are some of the benefits of having a third-party car insurance policy.

1.      Legally Allowed to Drive

As per the Motor Vehicle Act 1988, it is mandatory for car owners to have a third-party car insurance policy that is also known as a basic car insurance policy. It allows the car owner to drive on Indian roads legally.

2.      Cover for Third-Party

The main purpose of having a third-party car insurance policy is to provide cover for any kind of damage or loss caused to the third party by your own car. For example, Ram is driving on a road and he bumps into someone else’s car and damage their car. In this scenario, the third-party car insurance policy will provide financial aid/cover for the losses incurred in that accident.

3.      Won’t Get Fined

Since a third-party car insurance policy is mandatory for a car owner and if you don’t have one then the traffic police can fine you for a specific amount of money. Therefore, having a third-party car insurance policy can save you from getting fined or any kind of legal action against you at that part of the law.

Exclusions in Third-Party Car Insurance

The exclusions in third-party car insurance policy are as follows:

1.      Own Car Damage

The third-party car insurance policy does not provide cover for your own car damage.

2.      Drunk Driving

The third-party car insurance policy will not provide cover to the third-party liabilities if you are found drunk driving.

3.      Without Driver’s License

The third-party car insurance policy will not provide cover for any kind of third-party liabilities if you are caught driving without a license.

Comprehensive Car Insurance

A comprehensive car insurance policy provides cover for third-party liabilities as well as own damages. This provides cover against loss or damages caused by an accident, vandalism, fire, manmade disasters or floods. The insurance company also provides personal accident cover to the owner/driver. The coverage can be enhanced by purchasing add-on covers.

Benefits of Comprehensive Car Insurance

A comprehensive car insurance policy provides several benefits to the policyholder. They are as follows:

1.      Vandalism & Theft

A comprehensive car insurance policy will provide cover for any kind of vandalism caused by anyone to the car as well as in case of theft.

2.      Windshield Damage

In case of windshield damage, the comprehensive car insurance will provide cover to the policyholder for the replacement. For example, when a windshield breaks or cracks while driving on the road or parked the insurance company will provide cover for the replacement of the windshield.

3.      Extensive Coverage

The comprehensive car insurance policy will provide cover for the damage caused by any bird, animal, falling object or missiles etc.

4.      Cover from Natural Disaster

The comprehensive car insurance policy will provide cover for any kind of natural disaster like floods, wind storms, tornados, a hurricane that could cause damage to the vehicle.

Exclusions in Comprehensive Car Insurance

Here are some of the exclusions in a comprehensive car insurance policy.

• The insurance policy will not provide cover for wear, tear and aging of the vehicle.
• The mechanical or electrical breakdown will not be covered under the policy
• Only 50% of the total replacement charges will be covered if the tyre and tubes of the car get damaged in a car accident.
• The damage caused while driving without a valid driving license will not be covered.
• Damage caused while driving under the influence of alcohol will not be covered.
• Any damage caused due to any war or nuclear attack will not be covered.

Conclusion

It is mandatory for the car owners in India to have at least a basic car insurance policy that is a third-party car insurance policy so that it could provide financial aid to the policyholder at the time of any road mishap. Apart from a third-party car insurance policy, it is suggested by the insurance experts to have a comprehensive car insurance policy as well so that it could provide cover for your own car damage and physical loss incurred due to an accident. The policyholder also has an option of purchasing add-ons to enhance the coverage by adding personal accident cover that could provide cover to the driver/owner of the car for any physical injury.