By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Investment Simplified
  • Tax
    • Popular Searches
    • What is Form 16?
    • Trademark Registration Fees
    • TDS Full Form
    • Ad Valorem Tax
    • How to Save Tax?
  • Cryptocurrency
    • Popular Searches
    • Benefits of Using Blockchain Technology
    • What Is A Cryptocurrency Hardware Wallet?
    • What is Market Capitalization In Crypto?
    • What Is Staking In Crypto?
    • Investor’s Guide to Crypto Trading
  • Aadhaar
    • Popular Searches
    • How to Book Aadhaar Card Appointment?
    • E-Aadhaar And It’s Benefits
    • What is a Masked Aadhaar?
    • ESign Aadhaar: A Complete Guide
    • Aadhaar Card Address Change
  • Investment
    • Mutual Funds
      • Popular Searches
      • Tax Saving SIP
      • What is Arbitrage Fund?
      • What are Gold Mutual Funds?
      • What are Contra Funds?
      • Best SIP Plans to Invest
    • EPF
      • Popular Searches
      • EPFO Member Portal – Login, Registration
      • EPFO Establishment Search
      • Guide to Your EPFO Member Login
      • EPF Interest Rate
      • What Is UAN Activation?
  • Insurance
    • General Insurance
      • Popular Searches
      • Home Loan Insurance Calculator
      • What is Marine Insurance?
      • How Does a Marine Insurance Policy Work?
      • Types of Marine Insurance in India
      • Types of General Insurance in India
    • Car Insurance
      • Popular Searches
      • Commercial Vehicle Insurance Guide
      • What is Own Damage Insurance?
      • Car Insurance with Zero Depreciation
      • Engine Protect in Car Insurance
      • Return to Invoice Cover Meaning
    • Travel Insurance
      • Popular Searches
      • Domestic Travel Insurance
      • How to Buy Travel Insurance Online?
      • What is Overseas Travel Insurance?
      • International Travel Insurance
      • What is Travel Medical Insurance?
    • Pension & Retirement
      • Popular Searches
      • Commutation of Pension Calculator
      • EPF Pension calculator
      • Public Provident Fund
      • What is Individual Retirement Account?
      • Calculating PPF
  • Banking
    • Bank Timings
      • Popular Searches
      • Bank of Baroda Timings
      • IDBI Bank Timings
      • Union Bank Timings
      • Karnataka Bank Timings
      • Central Bank of India Timings
      • Canara Bank Timings
    • Mini Statement
      • Popular Searches
      • Axis Bank Mini Statement
      • HDFC Mini Statement
      • Bank of Baroda Mini Statement
      • Union Bank of India Mini Statement
      • SBI Mini Statement
    • Balance Enquiry
      • Popular Searches
      • Canara Bank Balance Enquiry by SMS, Missed Call, Netbanking
      • SBI Balance Enquiry
      • Union Bank of India Balance Enquiry Number
      • BOB Balance Enquiry
      • PNB Balance Check Number – Enquiry by SMS, Missed Call, Netbanking
    • NEFT
      • Popular Searches
      • HDFC NEFT
      • SBI NEFT
      • Axis Bank NEFT
      • ICICI Bank NEFT
      • Canara Bank NEFT
    • Net Banking
      • Popular Searches
      • HDFC Bank Net Banking
      • SBI Net Banking
      • ICICI Net Banking
      • Axis Bank Net Banking
      • IOB Net Banking
    • Customer Care
      • Popular Searches
      • Central Bank of India Customer Care Number
      • Bank of Baroda Customer Care – Missed Call and Toll Free Number
      • Bank of Maharashtra Customer Care
      • PNB Customer Care Number
      • IOB Customer Care Number
    • UPI
      • Popular Searches
      • BHIM
      • Google Pay
      • BHIM SBI Pay
      • Union Bank UPI
      • HDFC UPI
    • Debit Card
      • Popular Searches
      • SBI Debit Card
      • HDFC Debit Card
      • PNB Debit Card
      • Axis Bank Debit Card
      • Kotak Debit Card
    • RTGS
      • Popular Searches
      • RTGS Process
      • SBI RTGS
      • ICICI Bank RTGS Form
      • Axis Bank RTGS Form
      • HDFC RTGS Form
    • IMPS
      • Popular Searches
      • IMPS Limit
      • IMPS vs. NEFT
      • IMPS vs. NEFT vs. RTGS
      • MMID
    • Cheque
      • Popular Searches
      • Types of Cheques
      • Blank Cheque
      • Cancelled Cheque
      • Account Payee Cheque
      • Banker’s Cheque
    • Bank Holidays
      • Popular Searches
      • Bank Holidays in March 2023
      • Bank Holidays in April 2023
      • Bank Holidays in May 2023
      • Bank Holidays in June 2023
      • Bank Holidays in July 2023
    • Mobile Banking
      • Popular Searches
      • SBI Mobile Banking
      • HDFC Mobile Banking
      • Bank of Baroda Mobile Banking
      • Indian Bank Mobile Banking
      • Canara Bank Mobile Banking
    • Passbook
      • Popular Searches
      • SBI Passbook
      • Union Bank Passbook
      • BOB Passbook
      • HDFC Passbook
      • Axis Bank Passbook
    • Demand Draft
      • Popular Searches
  • PAN Card
    • Popular Searches
    • What is a PAN Card
    • NSDL PAN Card
    • UTI PAN
    • e-PAN Card
    • PAN Card Apply
  • About Us
  • Contact
Reading: What are the Key Differences Between Comprehensive and Third Party Insurance?
Share
Investment Simplified
Search
  • Tax
    • Popular Searches
    • What is Form 16?
    • Trademark Registration Fees
    • TDS Full Form
    • Ad Valorem Tax
    • How to Save Tax?
  • Cryptocurrency
    • Popular Searches
    • Benefits of Using Blockchain Technology
    • What Is A Cryptocurrency Hardware Wallet?
    • What is Market Capitalization In Crypto?
    • What Is Staking In Crypto?
    • Investor’s Guide to Crypto Trading
  • Aadhaar
    • Popular Searches
    • How to Book Aadhaar Card Appointment?
    • E-Aadhaar And It’s Benefits
    • What is a Masked Aadhaar?
    • ESign Aadhaar: A Complete Guide
    • Aadhaar Card Address Change
  • Investment
    • Mutual Funds
      • Popular Searches
      • Tax Saving SIP
      • What is Arbitrage Fund?
      • What are Gold Mutual Funds?
      • What are Contra Funds?
      • Best SIP Plans to Invest
    • EPF
      • Popular Searches
      • EPFO Member Portal – Login, Registration
      • EPFO Establishment Search
      • Guide to Your EPFO Member Login
      • EPF Interest Rate
      • What Is UAN Activation?
  • Insurance
    • General Insurance
      • Popular Searches
      • Home Loan Insurance Calculator
      • What is Marine Insurance?
      • How Does a Marine Insurance Policy Work?
      • Types of Marine Insurance in India
      • Types of General Insurance in India
    • Car Insurance
      • Popular Searches
      • Commercial Vehicle Insurance Guide
      • What is Own Damage Insurance?
      • Car Insurance with Zero Depreciation
      • Engine Protect in Car Insurance
      • Return to Invoice Cover Meaning
    • Travel Insurance
      • Popular Searches
      • Domestic Travel Insurance
      • How to Buy Travel Insurance Online?
      • What is Overseas Travel Insurance?
      • International Travel Insurance
      • What is Travel Medical Insurance?
    • Pension & Retirement
      • Popular Searches
      • Commutation of Pension Calculator
      • EPF Pension calculator
      • Public Provident Fund
      • What is Individual Retirement Account?
      • Calculating PPF
  • Banking
    • Bank Timings
      • Popular Searches
      • Bank of Baroda Timings
      • IDBI Bank Timings
      • Union Bank Timings
      • Karnataka Bank Timings
      • Central Bank of India Timings
      • Canara Bank Timings
    • Mini Statement
      • Popular Searches
      • Axis Bank Mini Statement
      • HDFC Mini Statement
      • Bank of Baroda Mini Statement
      • Union Bank of India Mini Statement
      • SBI Mini Statement
    • Balance Enquiry
      • Popular Searches
      • Canara Bank Balance Enquiry by SMS, Missed Call, Netbanking
      • SBI Balance Enquiry
      • Union Bank of India Balance Enquiry Number
      • BOB Balance Enquiry
      • PNB Balance Check Number – Enquiry by SMS, Missed Call, Netbanking
    • NEFT
      • Popular Searches
      • HDFC NEFT
      • SBI NEFT
      • Axis Bank NEFT
      • ICICI Bank NEFT
      • Canara Bank NEFT
    • Net Banking
      • Popular Searches
      • HDFC Bank Net Banking
      • SBI Net Banking
      • ICICI Net Banking
      • Axis Bank Net Banking
      • IOB Net Banking
    • Customer Care
      • Popular Searches
      • Central Bank of India Customer Care Number
      • Bank of Baroda Customer Care – Missed Call and Toll Free Number
      • Bank of Maharashtra Customer Care
      • PNB Customer Care Number
      • IOB Customer Care Number
    • UPI
      • Popular Searches
      • BHIM
      • Google Pay
      • BHIM SBI Pay
      • Union Bank UPI
      • HDFC UPI
    • Debit Card
      • Popular Searches
      • SBI Debit Card
      • HDFC Debit Card
      • PNB Debit Card
      • Axis Bank Debit Card
      • Kotak Debit Card
    • RTGS
      • Popular Searches
      • RTGS Process
      • SBI RTGS
      • ICICI Bank RTGS Form
      • Axis Bank RTGS Form
      • HDFC RTGS Form
    • IMPS
      • Popular Searches
      • IMPS Limit
      • IMPS vs. NEFT
      • IMPS vs. NEFT vs. RTGS
      • MMID
    • Cheque
      • Popular Searches
      • Types of Cheques
      • Blank Cheque
      • Cancelled Cheque
      • Account Payee Cheque
      • Banker’s Cheque
    • Bank Holidays
      • Popular Searches
      • Bank Holidays in March 2023
      • Bank Holidays in April 2023
      • Bank Holidays in May 2023
      • Bank Holidays in June 2023
      • Bank Holidays in July 2023
    • Mobile Banking
      • Popular Searches
      • SBI Mobile Banking
      • HDFC Mobile Banking
      • Bank of Baroda Mobile Banking
      • Indian Bank Mobile Banking
      • Canara Bank Mobile Banking
    • Passbook
      • Popular Searches
      • SBI Passbook
      • Union Bank Passbook
      • BOB Passbook
      • HDFC Passbook
      • Axis Bank Passbook
    • Demand Draft
      • Popular Searches
  • PAN Card
    • Popular Searches
    • What is a PAN Card
    • NSDL PAN Card
    • UTI PAN
    • e-PAN Card
    • PAN Card Apply
  • About Us
  • Contact
Investment Simplified > Car Insurance > What are the Key Differences Between Comprehensive and Third Party Insurance?
Car Insurance

What are the Key Differences Between Comprehensive and Third Party Insurance?

Lakshey Bahl
Lakshey Bahl May 11, 2022 9 Min Read
Updated 2022/08/29 at 3:26 PM
Share
SHARE

Comprehensive insurance covers every car damage apart from the collision and will help you pay for the repair and other costs. whereas the third party insurance only damages the third party car and persons covered. Read on to analyze the difference between comprehensive and third party insurance.

Contents
What do Comprehensive Car Insurance and Third Party Insurance Mean?Why Do We Need Car Insurance?What is the Effect of Not Having Car Insurance in India?Differences Between Comprehensive Insurance and Third Party InsurancePros and Cons of Comprehensive Car InsurancePros and Cons of Third Party Vehicle InsuranceExclusions in Third Party Car InsuranceConclusionFAQs on the Difference Between Comprehensive and Third Party Insurance

What do Comprehensive Car Insurance and Third Party Insurance Mean?

Car insurance, also popularly known as motor insurance, provides coverage for damage or loss to a vehicle, be it a car, commercial vehicle, or a two-wheeler. This type of insurance helps mitigates monetary damage to vehicles due to an accident or any other unexpected situation.

Comprehensive car insurance is a type of insurance which protects the passenger and the vehicle from financial losses because of an accident. Third-party car insurance, on the other hand, only covers legal and financial liabilities arising due to a third-party claim.

Why Do We Need Car Insurance?

  • We need car insurance because the government mandates it
  • Suppose there is an ugly fender bender; we need to compensate third parties for damages caused to them or their car
  • We need to meet the repair costs for the damage done to our own vehicle, no matter who caused the accident
  • To protect your assets
  • To cover your own passengers and get them treated for injuries
  • We need car insurance to protect us from catastrophic incidents
difference between comprehensive and third party insurance

What is the Effect of Not Having Car Insurance in India?

If you do not have car insurance, consequences may range from traffic violations, fines and penalties to suspension/disqualification of your driving license. The government of India has made it mandatory that all car drivers carry at least a third party insurance cover.

Differences Between Comprehensive Insurance and Third Party Insurance

Let us now dive into comprehensive vs third party insurance. The main difference between comprehensive and third party insurance is the kind of coverage it offers. Here is at table that helps understand the difference between comprehensive and third party insurance:

DetailsComprehensive InsuranceThird Party Insurance
DefinitionInsurance coverage for own damages and third party damages.Cover for only third party damages
Details of CoverageCoverage not only accidents but also thefts and damages from natural disasters.Third party Damages and costs only. No other coverage is available
BenefitsExtensive coverage covering most eventualities. Also offers No claim bonus (reductions in renewal premium) if no claims have been made in the preceding year.Covers liabilities arising from damages to third party damages and losses. You are protected from financial losses only for such events.
LimitationsRenewal premiums are expensive but protection ensures the least amount of personal financial losses in case of an accident.Renewal premiums are lower but the financial protection offered is also limited and coverage does not extend to own losses.
Price of premiumPremiums are more expensive. They are calculated on the make, type of car, year of manufacture, the city where you are driving and add-on riders that you buy.IRDAI (Insurance Development Regulatory Authority)  pre-determines the amount of premium. It is determined based on the cubic capacity of the cars. Premiums are less costly.
CustomizationOffers scope for customization through various add-on ridersZero scope for customization
Which one do you chooseThough premiums are expensive , this is offset by the extensive coverage against  accidents and more types of adverse events.If you have an old car or a card rarely driven , then third party coverage is sufficient to comply with legal requirements.
difference between comprehensive and third party insurance

Also Read: Car Insurance Renewal

Pros and Cons of Comprehensive Car Insurance

Now, that we know the difference between comprehensive and third party insurance, let us understand the pros and cons of each type. Comprehensive insurance offers protection against losses and damages to your car and person as well as losses and damages suffered by a third party during an accident, caused by a collision of your car against the third parties. Key benefits of comprehensive car insurance include:

  • All financial losses and damages to your own vehicle and person are covered. After a drastic collision, financial costs of injuries treatment and hospitalization may be high.
  • Third party comprehensive insurance protects you from all such damages occurring from fires, accidents and collisions.
  • All financial losses and damages to the third party and his person are protected. The third party is the person with whose car the collision has occurred.
  • There are several add-ons which offer additional coverage and protection in case of an accident.
  • Even though you pay higher premiums in comprehensive coverage but in the event of an accident when the insurance cover kicks in, this type of insurance offers the most financially optimum solution in terms of the coverage received.
  • Comprehensive car cover also covers your car against natural disasters, since, these calamities are unpredictable and you never know when you will be an unfortunate recipient for such damages from natural accidents.
  • You are compensated for car theft, the occurrence of which is increasing in major metros. Comprehensive insurance will enable you to replace one of your most prized possessions.
  • Breakdown assistance is one of the add-ons that can be tacked on to your comprehensive insurance.
  • This add-on will always ensure you are safely delivered home and your car hauled away for repairs without additional cost, claims or discomfort.

The cons of comprehensive insurance are the following:

  • It does not protect you due to the financial loss because of the natural wear and tear of the card and depreciation of the car over time. You will not be compensated for this.
  • Parts made of rubber and fiber within the car are covered damages under this policy.
  • Force Majeure conditions like war or other man made calamities are not covered under this insurance.
difference between comprehensive and third party insurance

Common Exclusions in Comprehensive Car Insurance

The common exclusions in comprehensive car insurance are as follows:

  • Driving without a license
  • Driving without a valid license holder
  • Drunk driving
  • Consequential damages that occur after the accident
  • Contributory negligence like driving your car during floods or earthquakes.

Pros and Cons of Third Party Vehicle Insurance

This is the type of most basic and legally mandated insurance by the Government of India. It covers damages to only the third party’s car and person in the event of an auto collision.

You will have to bear to the financial consequences of damages to your car, your person or your passengers. The benefits of third-party insurance can be as follows:

  • It covers damages and losses to third party persons or property during an accident or collision with your car
  • It enables you to drive with a valid license supported by third party insurance cover
  • It saves you from fines and penalties, suspension of the license etc.
  • The insurance premium is less costly than comprehensive insurance.

Exclusions in Third Party Car Insurance

Some exclusions in third party car insurance are as follows:

  • Drunk driving
  • Own damages and losses to your own car or person
  • Driving without a valid driving license.

Key Takeaways

  • It is incumbent on you to purchase car insurance as it is made mandatory under the traffic rules of the Government of India.
  • Buying car insurance protects you against unexpected financial losses and damages caused by your car’s collision with that of a third party’s.
  • Making the right choice about the type of insurance cover is also important as it is the difference between the majority of losses being covered by insurance and you being left unprotected to cover a major part of the losses and damages on your own.
  • Insurance is a hedge, a protection against unexpected, unanticipated events and the greater the amount of protection you have, the more secure you will be.

Also Read: Car Insurance with Zero Depreciation

Conclusion

Making the right choice of the type of insurance cover is important to protect the vehicle and passengers from unwanted damage and the losses that come with it. Weigh the pros and cons, cost versus the benefits and arrive at a calculated decision that best fits your financial and other circumstances.

FAQs on the Difference Between Comprehensive and Third Party Insurance

1. Why is purchasing comprehensive insurance a prudent decision?

Comprehensive insurance is a better decision because it offers you better coverage and covers you against most eventualities.

2. Why is comprehensive car insurance more expensive than third party insurance?

It covers your own damages to property and person as well as third party damages and costs. Plus various add-ons which offer additional protection and coverage also cost higher.

3. Can you switch from third party insurance to comprehensive car insurance at the time of renewal?

Yes it is possible to make such a switch.

4. What are the consequences of buying no insurance?

You will attract fines and penalties and also you will also be disqualified from driving.

5. What are the best riders to add in comprehensive car insurance?

The riders added will depend on the type of coverage and the age of the car. A return to invoice, zero depreciation cover and roadside assistance covers are useful riders.

Share this Article
Facebook Twitter Whatsapp Whatsapp Email Print
Previous Article Engine protection cover What is Engine Protection Cover in Car Insurance?
Next Article provident fund Employer Contribution to PF in Simple Steps
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Popular Searches
  • Commercial Vehicle Insurance
  • New Car Insurance
  • Why Get Personal Accident Insurance
  • What Is Roadside Assistance
  • What Is Own Damage Insurance
  • Comprehensive Vs Third Party Insurance
  • Comprehensive Insurance Guide
  • Car Insurance Online
  • Zero Dep Car Insurance
  • Return To Invoice Cover
  • Car Insurance Price
  • Car Insurance Renewal
  • How To Choose Car Insurance
  • Best Insurance Quote
  • Why Avoid Cheap Car Insurance
  • What Is Third Party Insurance
  • What Is Coverage In Insurance
  • Car Insurance Types
  • First Party Insurance Advantages
  • Engine Protect Car Insurance

 

Social Media

Social Media
Facebook
YouTube
Instagram
Twitter
Linkedin

Recent Post

Bank of India Passbook
Bank of India Passbook
Banking
ICICI Bank Passbook
ICICI Bank Passbook
Banking
IDBI Bank Passbook
IDBI Bank Passbook
Banking
PNB Passbook
Punjab National Bank Passbook
Banking

You Might also Like

PNB Passbook

Punjab National Bank Passbook

Punjab National Bank (PNB) is one of the largest public sector banks…

Read More
HDFC RTGS Timings

HDFC RTGS Timings

HDFC Bank is one of the most prominent private sector banks in…

Read More
icici mini statement

ICICI Bank Mini Statement: How to Download ICICI Mini Statement Online & Offline?

ICICI Bank Mini Statement is a list of the last 3 transactions…

Read More
ICICI NEFT Limit

ICICI NEFT Limit

When making an NEFT transfer request from your ICICI Bank account to…

Read More
IS logo 250px

We are here to make your investment journey simple by delivering content on financial topics in plain English.

Categories

  • Tax
  • Cryptocurrency
  • Aadhaar
  • Mutual Funds
  • Banking
  • General Insurance
  • Pension & Retirement
  • Car Insurance
  • Travel Insurance

Quick Link

  • About Us
  • Contact
  • Terms & Conditions
  • Privacy Policy
Social Media
Facebook
YouTube
Instagram
Twitter
Linkedin

We are here to make your investment journey simple by delivering content on financial topics in plain English.

Categories

  • Tax
  • Cryptocurrency
  • Aadhar
  • Mutual Funds
  • General Insurance
  • Pension & Retirement
  • Car Insurance
  • Travel Insurance

Quick Link

  • About Us
  • Contact
  • Terms & Conditions
  • Privacy Policy

Social Media

Copyright © 2023 Investment Simplified. All rights reserved.

Welcome Back!

Sign in to your account

Lost your password?