Impact of Upgrading from Third Party to Comprehensive Car Insurance

With the delight of possessing an automobile also comes its share of statutory responsibilities. The foremost among that is ensuring there is a valid insurance cover for the vehicle.

In today’s driving conditions of clogged roads and unpredictable driving habits, it is common enough for mishaps to happen. Having an insurance policy covers you against any such eventualities.

Broadly, there are two types of policies that are offered by insurance providers – Third Party and Comprehensive policies. Out of the two, Third Party insurance come under the statutory requirements and all vehicle owners have to compulsorily buy one. As for the Comprehensive cover, while it is not mandatory, it goes a step beyond Third Party and can be more flexible and powerful.

Here is a closer look at both these car insurance options and explore their relevance in context to what they offer.

Third Party

A Third Party insurance policy provides a cover against any damages caused by the vehicle to another vehicle or person. Should your vehicle be involved in any such mishap, this cover comes in handy. It gives you a legal protection from any damages to the third party, including to the vehicle or property. Also, you are legally covered in the event of death or injury to an occupant of the other vehicle. The insurance company also settles any claim arising from such an incident.

However, where a third party insurance policy proves to be inadequate is in its failure to cover your own car itself. Given the high cost of repairs for any accident or total loss of car, a plain third party cover still leaves you with the possibility of mounting expenses. Clearly, that is not reassuring for any vehicle owner and something where such a basic policy does not suffice.

To sum up, a Third party insurance is a basic cover and is more a regulatory requirement. It is a must for any vehicle that plies on the road. Not having even this cover can be punishable under the Motor Vehicles Act.

Comprehensive Cover

As the name itself suggests, this cover is broader in scope and provides a more rounded coverage beyond the narrower confines of the Third Party policy. Beyond the basic cover to a third party, any damage arising out of an accident or any incident to your own vehicle also gets covered here.

As in any mishap that could take place, the chances of your own vehicle getting damaged or a loss incurred is just as high as the other party getting impacted. The prospect of a trip to the workshop and incurring a huge repair bill is not a happy one for any vehicle owner. Having a policy that covers your own car or bike can certainly be a big relief.

The terms of a comprehensive policy usually covers the inclusions in detail. Besides the damage to the vehicle in the event of an accident, this also is useful in cases of theft of the vehicle and even the accessories. Depending on the policy details, there could be more scenarios and eventualities covered. Damage or loss due to fire, floods, vandalism and other such probable causes also are factored in. Situations we would not normally expect to occur – damage caused by animals or wildlife, riots or civil disturbances etc. – also come under the ambit of a comprehensive cover.

So, Third Party Or Comprehensive Cover?

Of course, as can be expected, a comprehensive cover would cost more than a third party policy. But, if a broader and long term view is taken, this marginal increase in premium can be well worth the cost. A vehicle is something that has both an emotional and monetary value and is not bought a frequent purchase. For a few hundred rupees, deciding to settle on an incomplete and inadequate cover can be a decision that may be rued in the future.

Having a comprehensive car insurance cover is the equivalent of having a peaceful ownership and driving experience. It certainly is worth the extra premium you would have to pay over and above the third party car insurance cover.

So, when looking for car insurance quotes, it is certainly advisable not to cut any corners and opt for a comprehensive cover.

Want to learn more about third party VS comprehensive car insurance? Watch this video!