Comprehensive Vs Third Party Car Insurance

When it comes to buying car insurance, there are many factors that you must consider. One of the crucial factors is the type of coverage you want. In India, most insurers offer two types of car insurance policies – third-party policy and comprehensive policy. A lot of people tend to get confused between the two, and often use the terms interchangeably. However, the truth is both the policies are different. Read on to know more about the differences:

What is Comprehensive Car Insurance?

A comprehensive car insurance plan is a type of policy that provides complete protection against third-party liabilities as well as damages to your vehicle due to an accident. Also, comprehensive insurance policy protects against damages to the car due to natural and man-made calamities such as burglary, theft, fire, flood, and earthquake.

You can enhance the coverage of your comprehensive car insurance by purchasing Riders. The Riders are essentially the coverage options that you can purchase at an additional premium and get coverage for things that are not covered under your regular policy. There are different types or Riders such as engine protector policy, zero depreciation cover, accessories cover, etc. You can choose any cover you want to suit your specific needs.

Important Things to know About Comprehensive Car Insurance Plan

A comprehensive car policy is the highest form of protection you can get for your vehicle. It is advisable to purchase a comprehensive policy for your car, even though it is not a mandatory requirement. With a comprehensive car insurance plan, you can be assured of full financial protection against potential damages due to accidents. Some of the important components of a comprehensive plan are:

  • It protects against all kinds of damages that you may suffer due to an accident
  • ·You can be assured of getting end-to-end protection for your vehicle against theft, robbery, and damages caused to your car due to natural catastrophes
  • It gives you the option to purchase add-on covers like zero-depreciation cover and engine protection cover to enhance the coverage
  • Third-party liabilities are covered that may occur in the event of an accident.

Benefits of Buying Car Insurance

  • The primary benefit of buying a car insurance cover is that it helps you get protection from any unfortunate damages and losses that may occur due to collision, fire, or road accidents. Thus, you can not only save on unexpected expenses but also ensure that your car is in good shape
  • One of the main reasons why a lot of people buy car insurance is to comply with the law and protect themselves from the losses that they may incur due to damages caused to third-party car or property as well as damages suffered to your car
  • Another significant benefit of buying comprehensive car insurance is that it is cost-effective. Although the premium for a comprehensive policy is higher, considering the benefits and the coverage you get, it helps you get higher savings in the long run
  • Car thefts can be difficult to deal with. But with comprehensive car insurance, you can get compensation for the loss

Exclusions of Comprehensive Car Insurance Policy

  • Any claims made in a situation where you are guilty of driving under the influence of alcohol or any other intoxicating substance will not be covered
  • As per the law, if you get involved in an accident while driving without having a valid driving licence, your claim won’t be covered
  • Any consequential damage after the accident will not be covered unless you have an add-on cover for such damages
  • Accidents caused due to mechanical or electrical breakdown are not covered

What is third-party car insurance?

In India, as per the Indian Motor Vehicle Act, every car owner must have third-party car insurance. Driving without a valid license is illegal, and if you are caught, you may have to pay a costly fine. Third-Party insurance is the most basic form of insurance and as the name suggests, it protects from the damages and losses caused to the third-party due to accident.

Exclusions of third-party insurance

  • One of the most significant drawbacks of a third-party car insurance is that it covers only the third-party liabilities damages; you will not get coverage for damages to your own car
  • Any damages you may cause while driving under the influence of alcohol and/or without having a valid driver’s license will not be covered under third-party liability car insurance
  • If the driver was underage or was driving on the wrong side of the road at the time of the accident, such claims will not be honoured
  • If you were using the insured vehicle for any commercial purpose, you will not get compensation for the loss

Benefits of buying third party car insurance

  • It is the most affordable way to get insurance cover; the third-party car insurance price is much cheaper than a comprehensive policy. Also, it helps you comply with the law and avoid paying costly fines and penalties
  • The main purpose of getting comprehensive car insurance cover is to get financial protection from the damages caused to third-party’s car or property. The third-party insurance will pay for the losses if you damage anyone's property.
  • You can easily buy third-party car insurance online, either through the website of the insurance company or from any of the insurance agent. You can also renew the policy online without any hassles.

Comprehensive vs third party car insurance policy

Differences

Third-Party Car Insurance

Comprehensive Car Insurance

What it is

It is the most basic form of car insurance that covers the damages caused to the third-party vehicle or property. It also covers death/ bodily injuries caused to third-party in an accident.

It offers all-round protection for your car and it covers third-party liabilities as well as damages to your own car and property

Advantages

It offers financial protection to you if you get involved in an accident and damage somebody’s vehicle or hurt someone. This way, you don't have to pay for the losses out of your pocket

It offers financial protection against both third-party liabilities as well as damages to your own vehicle. Thus, with a comprehensive cover, you won’t incur any losses

Disadvantages

It does not cover damages to your own car

The premium for comprehensive car insurance is slightly more expensive than third-party liability car insurance

Customisation

You cannot customise your third-party car insurance policy

You can customise your policy by adding add-ons to suit your needs. You can buy add-on covers like zero-depreciation cover, roadside assistance cover, and engine protection

Who should buy?

If you drive an old car or if you use your car sparingly, a third-party liability car insurance cover would be sufficient

Although the premium is slightly expensive than third-party car insurance, the comprehensive cover would be beneficial as it provides complete coverage. Also, if you don’t make any claim in a year, you can benefit from NCB (No Claim Bonus).


Accidents can happen at any time and they can dent your finances in a significant way. Hence, it is better to be safe than sorry and have an insurance cover to meet the losses occurring due to accidents. Depending on the insurance company you choose, and the add-ons cover you choose (for comprehensive car insurance), the features and benefits may vary. It is advisable to check the terms and conditions of the policy before you sign the paper.