As an owner, your car is your pride and joy. Why spend so much of your hard-earned money on buying your dream car and then fail to protect it? Car Insurance is a difficult subject to understand and gain clarity on. It’s daunting to figure out whether third party or comprehensive car insurance you need to get for your car and what suits you and is within your budget!
Insurance for automobiles is mandatory in India. If one is caught without a valid car insurance, it results in paying extremely heavy fines. Further, car insurance provides a safety net to the owner, to fall-back on, in case something goes wrong.
What makes it more difficult is the two different types of car insurance policies you can get for your vehicle. So, we are bringing some clarity on the differences and similarities between Third-Party car insurance and Comprehensive car insurance.
Third-Party car insurance, also known as liability cover is compulsory to have for any automobile in India. Generally, third-party insurance is inexpensive and comes with low premiums. Third-Party insurance prices are set by the government and are revised every year. As the name suggests, third-party car insurance offers cover to the policy holder against any financial liability for damage to a third-person.
A Third-Party insurance policy covers individuals, vehicles or properties who have been injured or damaged by the policy holder’s vehicle.
No limit to compensation in case of death or injury to a third party.
A comprehensive insurance policy is the combination of both third-party insurance and a protection cover for the owner and his vehicle as well. A comprehensive policy is also referred to as a package policy. Usually, comprehensive car insurance policies are more expensive and come with higher premiums.
– + All the inclusions of third-party car insurance.
Most insurance companies provide add-ons like engine and gearbox protection, zero depreciation cover, key-loss cover, road-side assistance etc.
It even covers everything under the third-party insurance.
Higher premium cost annually (but way better protection, so overall if you have an accident you’ll pay a fraction of the cost)
We get asked this a lot, which type of car insurance should owners of vehicles go for. We always state that both third-party insurance and comprehensive insurance have different use cases.
We recommend getting the third-party insurance only to people who have older cars or who are on a tight budget. Since, third party car insurance doesn’t cover anything except third-party liability, it is much cheaper to get.
If the value of your car is low, it is better to get a third-party car insurance policy. Mainly because it is cheaper to pay for repairs for an old car, than to pay high premiums. This works if your older car is barely used, and does only a few trips in a month. Your risk is low.
But in general, we feel that a comprehensive insurance is better, because it financially protects you and offers extended coverage. Since it also includes the third-party car insurance component, it is a little more expensive but well worth it. Since, repairing cars have become expensive nowadays, everybody prefers to get a comprehensive car insurance policy.
The fact that a comprehensive insurance policy covers both you and your car, it is a much better option. Specially, if your car is new or you’re not a budget or well, you’re just one of those people who doesn’t like being stressed about the expenses of repairing their car.
It’s better to be at peace when driving, regardless of what the roads throw your way.
Remember, it is always better to be safe than to be sorry. Nobody can predict accidents, and such expenses are high and can put a dent in your bank balance. Take up a policy which gives YOU peace of mind, be it a third-party insurance or a comprehensive insurance. The whole idea of insurance to make you feel safe and secured.
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