I recently purchased my first car after a long wait. After all, buying a car involves brainstorming, test drives, and many comparisons. Only then can you choose the most suitable car for your needs.
But the most critical part of my car ownership came next. This was buying car insurance. Without carrying out enough research, I settled for basic third-party insurance. I realised my mistake soon enough. The third-party insurance did not help. It did not cover damages to my own car. Soon after, I switched to a comprehensive car insurance plan. Here is what I learned from my experience.
Need for Car Insurance
Vehicle insurance is mandatory in India. You can buy insurance for a car, a two-wheeler, and even a commercial vehicle. This is a necessary and an important expense. The law requires every vehicle plying on Indian roads to be insured.
Moreover, car insurance is a safeguard against damage or even loss of life in the event of an accident. Car insurance is especially useful in case of damage due to accident, theft, or even natural disasters like earthquakes and floods. The insurer takes on the costs of repair or replacement during such events.
Car insurance renewal should be done annually. It falls under two main categories: third-party and comprehensive car cover.
Third Party Insurance
Since third-party insurance is mandatory by law, I purchased it from my car dealer after buying the car. Third-party insurance covers the expenses of the person/vehicle you or your car might damage.
For instance, if a third person dies or is injured because of an accident caused by my car, he/she can claim for damage under my third-party insurance plan. But third-party insurance does not cover the damages I may face as the car owner. As it acts solely in case of a liability to a third party, it is also known as an ‘act-only’ insurance cover. Overall, the plan covers property damage as well as accidental death and injury to a third party.
Comprehensive Insurance Cover
Comprehensive insurance covers the claim of a third party as well as damage to your car. Unlike third-party insurance, comprehensive cover pays for damages to your car. It even compensates for complete loss of your car due to an accident, natural calamities, theft, fire, and several man-made disasters. Comprehensive insurance also pays for medical expenses that you could incur due to an accident while driving.
Third Party VS Comprehensive
Though a comprehensive policy has a higher premium than third-party cover, the risk coverage is also wider. After all, third-party insurance only acts as a savior for the third person involved in the accident. It does not cover you for loss due to theft, burglary, and accidents, or any form of damage to your car.
At the end of the day, why should you hold back from covering yourself as well? Hence, it is advisable to buy comprehensive insurance cover. It covers expenses and losses for both you as well as the third party thus, keeping everyone happy.