Third Party vs Comprehensive Insurance, Detailed Comparison: August 2019

Third Party vs Comprehensive Insurance

third-party-vs-comphrehensive-car-insurance-2019

What is comprehensive car insurance?

Comprehensive car insurance – also known as fully comp cover – is one of the higher levels of protection you can get for your motor.

Third-party only and third-party, fire and theft policies cover damage to others as the result of an accident that was deemed your fault. Any damage to your own car is your own problem.

Comprehensive car insurance policies, on the other hand, cover for damage to your car as well.

The Benefits of a Comprehensive Car Insurance Plan

A comprehensive car insurance plan safeguards the insured vehicle against the following:

  • Vandalism
  • Theft
  • Glass damage like as a damaged windshield
  • Damages caused by a bird or an animal
  • Damage caused by falling objects, missiles etc.
  • Fire
  • Flood
  • Damages caused by a natural disaster like a wind storm, hail storm, tornado, hurricane, etc.
  • Third-party liability

What Comprehensive Car Insurance Does Not Cover?

 

1. Injury caused to self2. Damage caused to own vehicle3. Damage caused due to
  • Theft
  • Natural Calamities
  • Sabotage
  • Fire
  • Civil Disturbance
  • Normal Wear and Tear
  • Mechanical or electrical Breakdown
4. Damage caused when
  • Riding without a valid license
  • Riding under the influence of drugs or Alcohol
  • The policy is not active

What Is Third Party Insurance?

Third Party Insurance is the cover offered to the third party only, neither the first party or second will get the benefits from it. Suppose you hit someone with your car, then the victim that means the third party will get the claim of your insurance, the insurance company will pay for the disability, death or damage to the property of the third party.

What Third Party Insurance Covers?

  • Death or bodily injury to a third party
  • The accidental death of a third-party
  • Damage to third party property
  • Permanent total disabilities of a third-person

 While there is no limit on the liability covered for injury or death, the cover for third-party property (usually the third party’s car) damage is capped at Rs 7.5 lakh. “In case damages exceed the upper limit, the balance has to be paid by the policyholder himself,” says Sanjay Datta, Chief Underwriting & Claims, ICICI Lombard General Insurance.

What Third Party Insurance Does Not Covers?

  • Personal injury to the first party
  • Damage to the car of the first party
  • The insured victim needs to stick on to the terms and conditions of the insurance company while filing a third party claim. Any claim that doesn’t fall under the company’s terms and conditions will not be covered.

Difference between a Third-Party Cover and Comprehensive Cover

The pros and cons of these two kinds of car insurance plans depend on many elements. It is crucial to understand these factors so that you can analyze, compare, and then make a wise decision.

1. The Value of a Car

In case the value of your vehicle is low, it’s recommended to buy third-party insurance only, as the repairs to the damages could be managed very easily. It is economical to pay the repair bills as compared to paying for the high premium of a comprehensive insurance cover.
On the other hand, if your car is new and expensive, it is recommended to buy comprehensive insurance coverage.

2. Coverage

A third-party insurance plan provides coverage against the damages to any third-party vehicle and bodily injuries caused to any third party due to an accident. There are a few insurance providers that charge a little extra for third-party coverage. It doesn’t provide any coverage against the damages caused to your own vehicle.
In case you’re seeking coverage for your vehicle, you should buy a comprehensive car insurance plan. It offers a wide coverage, as it includes third-party liability as well. A comprehensive plan is expensive as compared to a third-party insurance plan, as it offers broader coverage.

3. Expenses

A comprehensive plan is expensive as compared to a third-party plan because it offers coverage for injuries, damages, and theft.
It is good to be safe than sorry. A road mishap is unfortunate and it can wash out your savings in one go. There can be minor variations when it comes to the exclusions and benefits, as it varies insurer to insurer. If you want the peace of mind and the right insurance coverage for your vehicle at the same time, then you should buy a comprehensive car insurance plan since it will fulfill all your insurance expectations.

Why Third Party Insurance is mandatory?

Nowadays people are comfortable in taking a loan, and with an increase in the number of people taking a loan, people also go for insurance as it is very important, for coverage against all the damages.

It is not mandatory to take insurance for the car, but part insurance is mandatory. But legally, they cannot force you to take one.

In fact, according to the Motor Vehicles Act, 1988, it is mandatory for every owner of a vehicle plying on the public roads to take an insurance policy to cover the amount, which owner has to pay as he is legally bounded as a result of accidental death, bodily injury or damage to property.

long-term third party insurance policy has been made mandatory by the Irdai following a Supreme Court order.

The three-year third-party insurance will cost Rs 5,286 for cars with engine capacity of less than 1,000 cc, Rs 9,534 (1,000 – 1,500 cc) and Rs 24,305 for cars with engine capacity of 1,500 cc and more.

In case of two-wheelers, the five year-third party insurance will cost Rs 1,045 for vehicles with engine capacity below 75 cc, Rs 3,285 (75-150 cc), Rs 5,453 (150-350 cc)

As regards the comprehensive insurance, which covers theft and damage among others, the vehicle buyer would have the option to buy it for one year or three years in case of cars and five years in case two-wheelers.

Leave a Reply

Your email address will not be published. Required fields are marked *