When you buy a car, purchasing car insurance is mandatory in India as per The Motor Vehicles Act 1988. You must consider several factors before buying the best insurance for your vehicle. One such factor is the type of insurance coverage you might want for your car. Two major types of car insurance policies are comprehensive insurance policy and a third-party insurance policy. Choosing between these two policies might be confusing for most of the people out there.
What is a third-party car insurance plan?
According to the Motor Vehicles Act, 1988, every motor vehicle owner must have at least third-party car insurance coverage compulsorily in India. This cover offers protection against any damages or injuries caused to a third-party person or property, by the insured vehicle.
What is a Comprehensive car insurance plan?
In case your vehicle meets with an accident, a comprehensive car insurance plan will provide coverage against any damage caused to your car in the road-mishap. It is known as a comprehensive plan as it covers all the damages caused to your car, third-party legal liability, theft, and personal accident coverage.
It also includes cover for fire, natural as well as man-made calamities like a tornado, hurricane vandalism, damage caused to your vehicle due to animals, falling objects, civil disturbance, like a riot that might cause damage to your car.
Now, let us look at why both these car insurance policies are different from each other:
Comparing Third-party and Comprehensive car insurance policies
- Consider the Value of Your Car
You must opt for third party car insurance if you can manage paying for the reparation costs of your vehicle. Third party car insurance will provide apt coverage and security required to compensate any liabilities caused to others in anyincident.
Nevertheless, if your car is brand new and expensive, it is recommended that you purchase comprehensive insurance coverage.
- Coverage provided
Under a third-party insurance plan, coverage is provided against any damages caused to the third-party vehicle along with bodily injuries caused to any third-party in the accident. However, coverage won’t be provided for the damages caused to your own vehicle.
When it comes to coverage for your vehicle, buy a comprehensive car insurance plan. Under this policy, you will be offered extensive coverage, and it also includes third-party liability.
- Cost of both the policies
When compared to a third-party insurance plan, a comprehensive plan might cost you a little more only because it offers broader coverage that included injuries, damages as well as theft. To determine the cost of your policy, use the online car insurance calculator.
If you happen to meet an accident that causes damage to your car, then there are high possibilities that you will have to spend a lot of your money on the repairs. However, always know the details of your car and choose your cover accordingly. Not every car needs a comprehensive policy, but sometimes a third-party liability cover might not be sufficient. Select for a plan that fulfils all your insurance expectations.