After a house, a car is probably the second-most-prized possession for peopleUsually, buying a car involves a lot of research and price comparisonWhile cars have evolved from being a sign of affluence to a necessity, people are also becoming increasingly aware of the importance of a good four-wheeler insurance policy.
There are two broad categories of car insurance policies availableThese are third-party liability and comprehensive policiesWhile the former offers protection against losses caused to a third person or property, the latter includes protection for your car and physical injury to you too.
Third-party liability policies are mandatorylaw, and hence, most car owners tend to buy them while purchasing the carHowever, when they realise that the plan does not cover any damage to their cars, they move to comprehensive plans.
However, how would a car owner decide which policy is better for him? This article will talk about pointers that can help you identify the right time to switch from third-party car insurance to comprehensive car insurance.
Table of Contents
Third-Party and Comprehensive Car Insurance
When you buy third-party car insurance online, the coverage offeredthe insurer is limitedIt is a basic policy mandatedthe Motor Vehicles Act in IndiaIf your car meets with an accident and causes damages to a third person or third-party property, then this policy covers the financial losses arising from it provided you are at fault.
On the other hand, when you buy a comprehensive policy, the coverage extends from third parties to youHence, if your car meets with an accident and results in damage to your car as well as a third-party car, then this policy offers coverage for bothIt also offers coverage for damages caused due to fire, theft, man-made and natural disasters, etcThere are many add-ons available that help you customise the policy to suit your specific needs.
Difference between Comprehensive and Third-party Car Insurance
Here are some primary differences between third-party and comprehensive car insurance policies:
| Third-Party car insurance | Comprehensive car insurance | |
| Coverage | Only for damages to a third person or third-party property. | Includes damages to third person and propertyIt also includes damages to you and your car. |
| Premium | Premium is determinedthe IRDAIThe insurer has no control over the premium amount. | Premium depends on factors like the model of the car, the city of residence of the policyholder, IDV, add-ons, etc. |
| Add-ons | No option of add-ons | A wide range of add-ons that can help you customise the policy as per your needs. |
Switching From Third-Party to Comprehensive Four-Wheeler Insurance
If you are wondering when you should switch from third-party liability insurance to comprehensive insurance, then here are some points that can help you make the decision:
- You need coverage for damages to your car
Third-party car insurance offers cover for damages to third-party (person and property) onlyIt does not cover damages to you or your car if you meet with an accidentHence, you have to bear the costs of repairs..
If you live in a high-traffic area or drive on highways where the probability of an accident is higher, then opting for a comprehensive four-wheeler insurance plan makes senseAlso, if you are a new driver, then minor mishaps are highly probableA comprehensive plan can help you manage repair costs with ease.
- You need a customised plan.
In third-party car insurance, you don’t have the option of add-on coversHence, these policies are standard with no customisation optionsHowever, if your driving conditions or use of the car is unique and demands a tailored insurance plan, then you need to opt for a comprehensive car insurance policyMost insurers offer a range of add-on covers to choose from that can help you customise the policy as per your unique needs.
- Personal Accident Cover
If you are worried about treatment charges if you meet with an accident and sustain physical injuries, then a comprehensive car insurance plan is a better option since it offers personal accident cover too.
Summing Up
While you put in a lot of time and effort to find the right car for your needs, you need to ensure that you put in equal time to find the perfect insurance plan for your carWhile a third-party car insurance policy is mandatedlaw, it does not offer cover for damages to you or your car.
Hence, ensure that you assess your insurance requirements and choose a comprehensive car insurance plan if you need the added benefits offeredthese plansBefore you buy car insurance, make sure that you research the market and compare plans.
You can use a car insurance calculator available on the websites of most insurers to calculate the premium amount and compare it across insurersAlso, make sure that you check the claim process and choose a provider that has a good track record of processing claimsFor example, the Tata AIG car insurance claim settlement ratio is 98%Look for providers with a similar claim settlement ratio or higherGood Luck!
