Deciding Which Policy to Buy: Third-party Vs Comprehensive Car Insurance

Written by Kelsey Lacey

Car owners are undoubtedly confused between buying a third-party and a comprehensive car insurance policy.

Despite our best efforts to protect our vehicles from accidental damage and other mishaps such as burglary, natural disasters, theft, fire explosions, and much more, such unfortunate circumstances do occur.

A car insurance policy comes to the rescue to protect car owners financially from the situations mentioned above.

There are two main motor insurance policies available, third-party and comprehensive car insurance. Let us learn a bit about both:

Third-Party insurance coverage: The policyholder receives financial assistance if he causes an accident, damage, or injury to a third-party person or property. Furthermore, it provides legal protection to protect you, the policyholder, from any harm your vehicle causes to a third party.

The third party car insurance policy covers any injuries, disabilities, deaths, or damage to vehicles or property caused to another person, such as pedestrians, other automobile occupants, passengers, or bystanders. *

Comprehensive car insurance policy: This insurance policy is designed to meet all your needs and protect you from losses in many ways. Unlike a third-party liability policy, this plan provides complete coverage. In layman’s terms, a comprehensive insurance policy covers both own damage and third-party losses. *

Reasons to upgrade from third-party to comprehensive car insurance

A third-party car insurance policy only covers third-party liability. In contrast, a comprehensive policy covers both third-party and own damage. Comprehensive coverage, as opposed to third-party coverage, protects you from theft or total loss of your vehicle, including its accessories. *

A comprehensive car insurance policy covers all eventualities, including fire, vandalism, explosions, natural disasters, and more.

Steps to transfer your third-party car insurance policy to a comprehensive plan:

  • Visit a car insurance provider’s online portal.
  • Enter your vehicle information.
  • Select a comprehensive auto insurance policy.
  • Set your car’s Insured Declared Value.
  • If necessary, purchase additional coverages or add-ons.
  • Check car insurance prices & finish the payment.

* Standard T&C Apply

Things to consider before changing to a comprehensive car insurance policy:

  • Price of policy: To make the most cost-effective decision, you should always compare plans from different insurance providers based on their benefits. Furthermore, look at the number of add-ons offered by the companies to ensure that all of your needs are met.
  • Maximum coverage: The sole reason for switching policies is to improve your car insurance policy coverage and receive the most benefit. As a result, you should always compare the policy features offered by various insurance providers.
  • Insured Declared Value (IDV): The IDV is your vehicle’s estimated current market value. The IDV of your vehicle will determine the value of your car insurance coverage. Furthermore, it is the maximum amount your insurance provider is obligated to pay in the event of theft or damage to your vehicle.
  • No Claim Bonus: A NCB is a reward given to a policyholder who does not file any claims during the policy period. It is provided in the form of premium concessions. However, it is applicable only from the second year.

* Standard T&C Apply

Conclusion: Unlike third-party car insurance, a comprehensive car insurance policy is not made compulsory by law. However, it provides numerous benefits to the policyholder. Because it allows for financial security, the policyholder can live stress-free in the event of an unforeseen event that damages the vehicle.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

About the author

Kelsey Lacey