Difference Between Comprehensive and Third-Party Car Insurance

Before you buy car insurance, it is important to learn the difference between comprehensive and third party car insurance. Insurance for your car is essential protection when you drive on the roads. When your car meets with an unfortunate mishap, either caused by you or a third party, insurance is the cushion to meet the expenses for repairing the car and getting it ready for the road again. At Tata AIG, we offer three types of policies: comprehensive car policy, standalone, third-party car insurance policy and standalone own-damage car insurance policy.

Most car insurance buyers are confused between the legally mandated, affordable but limited-coverage third-party cover and the all-encompassing but higher-priced comprehensive car insurance cover. In this article, we will help you understand the difference and help you choose the policy of your choice.

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What is Third-Party Insurance?

When your car is involved in an accident caused by you, the third party’s vehicle may be damaged and the driver and passengers in the other car may suffer injuries. In such a condition, the third party is eligible to claim the expenses for repairing their vehicle, cost of medical treatment and other expenses directly attributable to the accident.

Legally you are bound to make the payment for all the above for the third party. It is precisely to help you manage the financial outflows of such circumstances that you should hold third-party vehicle insurance for your car.

In the standalone third-party insurance policy, the insurance company will reimburse the third party for the damage to their vehicle and injuries to the driver and passengers of their car. It also covers the legal liabilities arising from third-party damages. The policy does not cover any resulting damage to your vehicle. The motor laws in India specify third party car insurance cover as the basic minimum to drive your car on public roads.

What is Comprehensive Insurance?

A comprehensive car insurance policy offers the highest level of protection. With this all-inclusive policy, coverage is available for damage to third parties and your own vehicle due to accidents. It also covers your vehicle for losses due to total damage, theft, natural calamities, riots, miscreant damage etc.

Further, you (the owner-driver) get a Personal Accident Cover to get protection against the medical expenses arising from injuries and hospitalisation due to an accident. This cover also pays out a death benefit to the family in case of your unfortunate demise due to a vehicular accident. With a comprehensive car policy, you can enhance the coverage of your base policy and get protection against specific circumstances with multiple add-ons. You can choose from a list of optional add-ons that your insurance company offers and include the relevant ones in your policy. Remember that add-ons are optional and entail the payment of an additional premium, so only select the ones that you really need.

Comprehensive Car Insurance vs Third-Party Car Insurance

In the table below, you can see the difference between a comprehensive policy and a third-party cover car insurance policy.

Coverage feature Comprehensive car insurance Standalone third-party car insurance
Basic coverage Comprehensive car insurance protects your car and passengers and the third-party’s car and passengers from financial losses incurred due to an accident. Standalone third party car insurance only covers the financial and legal liabilities arising from a third-party claim. These third-party claims can include damage to third-party property and injuries or the death of a third party.
Coverage for own damage Besides damage due to an accident, the policy covers losses due to theft, riots, natural calamities, fire, miscreant damage etc for your car. It does not cover own damage but only damage and injuries or death of a third party in an accident.
Legal requirement Not necessary Mandatory to drive on Indian roads
Premium computation method The car insurance premium is based on the IDV and the add-ons chosen. You can determine the amount from our online calculator. It is fixed and declared by the IRDAI on an annual basis based on the engine’s cubic capacity.
Premium cost As the coverage is quite extensive, the premium for a comprehensive car insurance policy is higher than a standalone third-party policy but cheaper than two separate standalone policies—one for the third party and one for own damage It is one of the most affordable car insurance policies due to the limited coverage offered.
Exclusions There are a few common exclusions to the protection offered to your car. These include driving under the influence of alcohol or drugs, driving outside India, driving without a valid licence, negligent driving and so on Damages to the car and any injuries to the owner-driver are not covered under a standalone third party car insurance policy.
Add-on riders About 13 add - on riders such as zero depreciation, NCB retention, engine protect etc are available. Add-ons are not available.

Which Policy Should You opt for: Comprehensive or Third-Party?

Just looking at the extent of coverage and the range of benefits offered by a comprehensive car insurance policy, it should be your obvious choice for a 360° coverage.

However, certain insurers do not offer a comprehensive car insurance cover for cars more than 10 years old. Also, you might have an old car, simply for nostalgia’s sake, which you seldom drive around. You can buy a basic third-party cover for such vehicles.

Tata AIG Comprehensive Car Insurance

With Tata AIG, purchasing your car insurance policy can be completed in three simple steps:

  • Visit our website, go to the car insurance page and input the car registration number in the online calculator provided.
  • Give the personal details and other details of your car. You should also specify the car insurance add-ons you wish to include in your policy.
  • Our online car insurance calculator will provide you with a premium quote. You can then pay the premium online and download the policy document from the website.

Buying a TATA AIG car insurance policy comes with the following advantages:

  • An easy online process with secure and safe transactions
  • 12 unique add-ons to customize your policy according to your needs
  • 7500+ network garages to help you with cashless claim settlement
  • Easy and quick claim settlement process
  • 24x7 customer assistance
  • High claim settlement ratio

Conclusion

Comprehensive car insurance and third-party car insurance differ in the coverage they offer. In third-party car insurance, damage to the third-party vehicle and personal injuries and death of passengers is covered. But own damage cover is not available. In a comprehensive car insurance policy, both third-party damage and own damage cover are available, along with personal accident cover for the owner-driver.

For complete protection for your beloved four-wheeler, choose comprehensive car insurance from Tata AIA. For more details, visit our website today!

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