What exactly is the difference between comprehensive and third-party motor insurance? While a third-party motor insurance policy covers for a third-party person or property, the comprehensive motor insurance policy offers coverage for its damage with a third-party.
Simply put, the difference lies in the coverage they offer.
There are some other aspects as well under which these insurance plans differ:
Third-Party Vs Comprehensive Motor Insurance - A Comparative Analysis
The coverage and purpose both differ in comprehensive and third-party motor insurance policies. Here we have done a comparison between the two under some specific parameters:
Parameter | Third-Party Insurance | Comprehensive Insurance |
Definition | The third-party motor insurance policy provides insurance coverage against losses and damages that occurred to third-party persons or property. | Comprehensive motor insurance provides coverage for third-party as well as own vehicle loss and damages. |
Coverage | The third-party vehicle insurance policy covers third-party persons or property only. | A comprehensive insurance plan covers both third-party and owned vehicles. |
Benefits | It provides protection in case you accidentally hit some other vehicle or someone else's property on the road by your vehicle. | If you accidentally hit some other vehicle on the road, then this motor insurance covers your vehicle, if it gets damaged in this mishap as well as the third party involved in this accident, i.e the vehicle, person, or other property you hit. |
Limitations | It does not cover losses and damages incurred to own vehicles. | Due to its comprehensive coverage, it is comparatively expensive. |
Riders/Add-Ons | There are no riders or add-ons available for this policy. | There are many riders or add-ons offered under this motor insurance policy to enhance its coverage. |
Premium Cost | The premiums of third-party motor insurance policies are declared by IRDAI and are same across all the insurers. Moreover, third-party insurance premiums are much more affordable than comprehensive motor insurance policies. | The premiums are high because of the high and comprehensive coverage. Moreover, they can vary with insurer as per the inclusions. |
Which is Best For Me? | If you rarely drive the vehicle or the car that you currently drive is very old, then you can opt for a third-party motor insurance policy. Or sometimes for commercial vehicles also third-party motor insurance is preferred. | Although a comprehensive motor insurance policy is slightly expensive, it offers extended coverage. So, if you drive regularly, or own a new car, or want extended coverage for your vehicle, then comprehensive vehicle insurance should be your choice. |
Even though both types of motor insurance policies have their pros and cons, a comprehensive vehicle insurance policy is recommended because of the following reasons:
Advantages of Comprehensive Insurance Policy vis-à-vis Third-Party Insurance
You Get Insurance Coverage For Own Vehicle Damage: Since a third-party motor insurance policy offers coverage for losses and damages incurred to third-party property and persons only, it does not offer coverage for own vehicle damage. However, if you buy a comprehensive policy, it offers coverage for damages to your vehicle as well.
You Get Insurance Coverage for Third-Party Also: Unlike a third-party vehicle insurance policy, comprehensive motor insurance provides coverage for both your vehicle and a third party.
To Get Better Coverage, You Can Customise Your Comprehensive Motor Insurance Policy: With a comprehensive motor insurance policy, you can customise it and make it as per your expectations. There are various add-ons provided by insurers and by adding them you can enhance its coverage.
Option to Customise IDV: Most motor insurance providers give you the option to customize your vehicle’s IDV or Insured Declared Value when you buy a comprehensive car insurance policy from them.
Coverage For Personal Accidents: The policy also offers coverage for personal accidents. This means you do not need to buy a separate cover for a personal accident when you have a comprehensive motor insurance plan.
Conclusion
Buying a vehicle insurance policy is mandated by law and you should adhere to it. Opting for third-party insurance is one of the ways to observe the law and drive safely on roads, but buying a comprehensive cover is always beneficial. We have given a comparative analysis of both these types of motor insurance plans and the decision is always yours, on which to select.
