Owning cars has become a matter of comfort and safety, more than fashion. One of the most important aspects one will have to consider is insurance. The kind of insurance one chooses can determine how much support one can get in the time of need. It is important to understand the types of insurance and how each type works.
What Is Third Party Insurance?
This type of insurance covers legal liabilities against third-party people and properties in case of a car accident that causes severe damages. This type of insurance will aid the insured to pay compensation to the third party for property damage, injuries, and death. In India, as per the Motor Vehicles Act, 1988, third-party insurance is mandatory for all vehicle owners.
What Is Comprehensive Car Insurance?
While a Third Party insurance only covers liabilities towards the third party, comprehensive car insurance covers damages for both parties involved in the accident. It covers the insured against theft, accidents, damages caused by natural calamities, riots, etc. This type of plan is not compulsory but it certainly provides added benefits and the privilege to include add-on covers that can enhance the existing plan.
Why Is Comprehensive Insurance Better than Third Party Insurance?
When there is an accident, a Third Party insurance will help the insured to pay for the liabilities towards a third party but not for the insured. With comprehensive insurance, the insured can avail of complete coverage for themselves and compensation costs for a third party
Comprehensive insurance allows the insured to include add-on covers with extra premiums and customise the plan. Since it allows one to purchase add-on covers and offers an extensive cover, there is value for money. Though Third Party Insurance is cheap, it does not provide complete protection
The Insured Declared Value is the insured sum that the insurance provider will have to provide when a claim is raised. This is decided at the time of purchasing the insurance plan. While Third Party Insurance has a fixed premium rate based on IRDAI standards, comprehensive insurance premium rates depend on various factors. The IDV of the vehicle can also be customised with comprehensive insurance
No Claim Bonus
Insurance costs money and for the best benefits, one would have to pay a bit more premium. In such cases, one must see when they can get better value. In case of a minor accident, avoid making claims. During a policy tenure, if the insured does not make any claims they will be eligible for a special discount of the premium ranging from 20-50% at the time of renewal. This can be availed only with a Comprehensive Insurance plan or an Own Damage Insurance plan
Comprehensive Insurance allows the insured to avail benefits of on-site minor repair in case of a breakdown. The insured can contact their insurance provider and a mechanic will be sent to the location. This facility is not available in a third party insurance plan All those who have their vehicle registered with the Regional Transport Authority must buy insurance for their vehicle. Click here to learn about the types of insurance plans and their benefits. Choose what suits you the best!