What is the difference between Third party and Comprehensive Insurance?

Insurance is now one of the mandatory documents one should have for his/her vehicles. There are two types of insurance - Third Party and Comprehensive. The major difference between the two is just the kind of coverage the company offers. Comprehensive insurance covers all sorts of damages that took place either by an accident or yourself whereas the other one only considers third-party damages and losses. 

The most crucial task in India is to choose the right type of policy for your vehicle. Without a policy is just violating the traffic rules as it is necessary for every vehicle to have third party insurance as per laws. If a person is caught without an insurance policy there are heavy fines charged with a possibility of cancellation of your driving license. 

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Here is a difference between third party and comprehensive insurance for your better understanding. This will help you make a wiser decision according to your needs and pocket. An insurance policy might seem to be an unnecessary expense but is an important one to consider as it will always protect your vehicle from thefts, accidents, mishaps, and more. 

Comprehensive Insurance Policy 

This type of insurance covers all sorts of damages caused to you and your car as well. It also covers all the third-party damages and losses as well and is one of the most preferred type of insurance. Few benefits of purchasing this type of policy are mentioned below. 

Benefits-

1. Coverage of all sorts of car damages

Even in the case of a mishap, this insurance promises to take care of the repair expenses. It also provides a claim for any type of accident, theft, collision or any other type of mishappening caused to you and your car.

2. Pocket Friendly 

This type of insurance protects you from all kinds of third party liabilities and also protects you from all losses in case you have damaged a person or any property. 

3. Customizable IDV

If you purchase comprehensive insurance online on your own, some web portals like digit offer an option of customizable IDV which you can set the market value of your car on your own. The market value of the car affects your premium and claim amounts as well. 

4. Choose for Add-ons

In a comprehensive type of insurance, the owner can customize the policy in their own way by just choosing some add-ons for the kind of coverage for your car. It includes engine and gearbox, invoice reimbursement, and other damages that occurred. 

5. Cost-Effective

Though comprehensive insurance asks for a higher premium as compared to the third-party one, it is a profitable one as it protects you and your car from all sorts of mishaps. 

6. Protects from Natural Disasters

Natural disasters can happen anytime anywhere whereas comprehensive insurance as discussed earlier also saves your car from all such damages and losses. 

7. Breakdown assistance

It is also an add-on to the policy which helps in assisting during breakdown. The best part about this is it does not count the coverage as a claim. Wherever there is a breakdown the assistance team is just a call away. 

8. Avoid depreciation with zero dep

If you are purchasing a new vehicle, you can opt for zero depreciation cover which keeps your car brand new. This type is only valid for five years from the year of purchase. 

Limitations-

1. Do not cover damages that took place due to the wear and tear of your car or due to the ageing of your car.
2. Cannot protect the car from the depreciation of the value of your car.
3. Within this insurance fibre or rubber parts are not covered.
4. It also does not pay or cover damages that are caused due to war or nuclear attack. 

Exclusions-

1. Negligence
2. Consequential Losses
3. Driving without a driving license
4. Drink and Drive

What is Third Party Insurance?

As per the laws, a third-party insurance is an important one as it is mandatory for every vehicle to have this if not a comprehensive one. This insurance policy is a basic one and it will protect your car from all sorts of damages that are caused due to a third party and will not cover for damages caused by your own negligence.

Benefits-

1.Covers third-party liabilities

The main purpose of this type of insurance is to protect you from damages and losses caused to a third party because of your vehicle. 

2. Important Legal Document

As it is important and mandatory by the law that every vehicle must have either comprehensive insurance or third-party insurance. 

3. Protects from fines

If you are caught without a policy you will be required to pay hefty fines. 

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Exclusions-

1. Negligence
2. Consequential Losses
3. Driving without a driving license
4. Drink and Drive

Insurance is not only one of the most important documents but is also one of the most needed documents as well. The government has made it compulsory for everyone to have at least a third-party insurance policy if not a comprehensive one. Though the comprehensive type of insurance is more feasible and pocket friendly as it asks for a bit higher premium but covers all sorts of damages and losses caused to your car and you. The difference between the two policies along with benefits and limitations has been listed above so choose wisely which one is the best-suited for you.

How do you find the difference between the policies? Let us know in the comment section. Also do join our 91Wheels Telegram and 91Wheels Whatsapp group to know more about vehicles, conduct discussions on your favourite ride and much more! Also, you can subscribe to our Youtube channel for video content on the latest from the world of cars and motorcycles.