When it comes to picking a car insurance policy, it’s a toss-up between two primary policies – a ‘comprehensive’ car insurance and ‘third-party’ insurances. Here is a quick look at the pros and cons that you need to keep in mind and difference between the various options.
What is Comprehensive Insurance?
In simple terms, comprehensive car insurance offers extensive coverage to third-party liabilities, as well as damage dealt to your own vehicle. As per law, it is not mandatory to have a comprehensive car insurance policy, however, because of the benefits it offers, it’s a preferred choice amongst the buyers.
What is Third-Party Insurance?
As the name suggests, a third-party car insurance covers and reimburses the losses caused to a third-party vehicle, life, property etc. by the insured four-vehicle. It is the most basic and minimal form of car insurance one can buy in India.
It won’t cover the damage caused to your vehicle but will provide legal and financial assistance if and when you injure someone or damage their property in case of a mishap.
Pros and cons of getting a comprehensive car insurance
It offers a diverse coverage. And with that, we mean, unlike the third-party coverage, it will cover for your own damages as well. Your car gets covered for theft, fire, natural calamity-induced damages, man-made calamities (riots/vandalism).
Furthermore, you can purchase add-ons such as zero depreciation and engine and gearbox covers to enhance your protection plan. Also, no-claim bonuses, in years when the owner doesn’t claim any damage, are provided by the means of a discounted premiums.
The cost of a comprehensive insurance policy is slightly on the north side as compared to a basic third-party insurance but the wide range of covers speak for themselves and ensures the safety of your vehicle even years after its purchase.
Pros and cons of getting a third-party insurance
The predetermined IRDAI-approved premium rates of a third-party insurance are cheaper than that of a comprehensive one. However, there are no customisations available and the owner is not covered for the damages to his own vehicle.
No bonuses or discounts are available on third-party insurances. While the policy covers third-party damages, one is still exposed to ‘own’ damages and that is why, it is the simplest, most basic vehicle policy one can get in India.
What policy should you buy for your old car?
If you are purchasing an old car in India, or you are a safe driver, or you don’t use your car a lot, getting a third-party insurance will be the viable option for you. This way, you won’t have to worry about paying hefty premiums.
Nevertheless, it depends person to person, and by the wide coverage a comprehensive policy offers, it’s always a smart choice to get one despite the expensive premium charges.
