Which one to buy: Third party cover or comprehensive cover

In India, third party motor insurance cover is mandatory as it provides protection against any liability arising out of damage caused by your vehicle to the life, limb, vehicle and property of the third party. But since the third party cover does not offer any kind of protection against damage caused to your vehicle or any bodily injury sustained by you in the accident, the third party cover can be inadequate. However, insurance companies offer comprehensive insurance cover that protects you against any damage caused to your vehicle or bodily injury sustained by you in the accident requiring hospitalisation and medical treatment. To decide which cover to opt for, let us look at the pros and cons of both these policies.

Third party motor insurance

As stated above, the third party insurance cover provides protection against any liability arising out of damage caused to the vehicle of the third party in case of collision or any damage caused to the property of the third party in case your vehicle crashes into the property of the third party. It also covers any legal liability arising due to the death of the third party or bodily injury caused by your vehicle to the third party requiring hospitalisation and medical treatment. Since, the third party insurance does offer any protection to you or your vehicle, it is quite cheaper than comprehensive insurance policy.

Third party insurance cover is suitable for vehicles that are more than a decade old or for low-cost vehicles. Since the market value of old vehicles or lower-end vehicles is quite less, the cost of repairs of these vehicles can be manageable. Also, if you drive your vehicle for just two or three days in a month and drive only short distances, the third party insurance may be just right for you.

Comprehensive motor insurance

The comprehensive motor insurance provides comprehensive protection to you and your vehicle as well as to the vehicle, property, life and limb of the third party. Due to this, it is the most popular vehicle insurance policy among vehicle owners. For the vehicle owner, it provides cover for damages caused to the vehicle due to collision or crash. This policy also provides compensation for any damage caused to the vehicle by natural disasters such as flood, typhoon, lightening, hailstorm, fire, earthquake, landslide, etc. as also any damage due to man-made causes such as theft, rioting, arson, vandalism, terrorist attack, or any other malicious act. The cover can be extended to cover any damage caused to the engine and accessories. It also provides personal accident cover to the occupants of both the cars involved in the collision, which includes cost of hospitalisation and medical treatment, or compensation to the heirs of the victims in the event of death of the insured or death of the occupants of the vehicle of the third party.

This type of policy is suitable for new cars or expensive cars as the cost of repairs of a new or an expensive car can be quite high.