Comprehensive and third-party insurance are two highly sought-after vehicle insurance options in India, and for a good reason! Road accidents are on the rise in our country. According to the Press Information Bureau, a total of 4,61,312 road accidents have been reported by States and Union Territories in 2022. These claimed 1,68,491 lives and caused injuries to exactly 4,43,366 people. Straight 11.9% rise in accidents compared to last year!
But many individuals, especially those buying insurance online, get stuck choosing between these two policies. Are you feeling confused as well? Don’t worry.
In this blog, Aapka Policywala is here to break down the differences between comprehensive and third-party insurance. By understanding what each covers, you can make the right decision for your vehicle and your wallet.
Let’s start!
Comprehensive vs Third-Party Insurance: Coverage Scope
The fundamental difference between these two policies lies in their coverage scope. Third-party insurance (mandated by law in India) provides basic protection. It covers your legal liability for any injuries or property damage caused to a third party (say another vehicle, person, or possessions) during an accident you are responsible for. However, it doesn’t cover any damage to your vehicle.
The scope of comprehensive insurance, as the name itself suggests, goes beyond third-party insurance. Yes, apart from encompassing everything a third-party policy offers, it additionally protects your own vehicle in case of damage or loss. This includes scenarios like accidents (even if you’re at fault), theft, vandalism, fire, natural disasters, and even riots.
Comprehensive vs Third-Party Insurance: Cost
Okay, this one is pretty obvious. The broader the coverage, the higher the price! Premiums for comprehensive insurance plans are significantly higher compared to third-party policies. Now you must be thinking, “Why though?” That’s because the insurance company assumes a greater financial risk by covering not just third-party liabilities but also potential damage to your own car.
But is it worth paying extra? Definitely! For more details, you can contact Aapka Policywala. Our team of PSOP agents will be more than happy to help you throughout your insurance-buying journey.
Comprehensive and Third-Party Insurance: IDV
For those who don’t know, IDV stands for Insured Declared Value! Now this term plays a crucial role for comprehensive insurance. It represents the maximum sum the insurer will pay in case of total loss or theft of your vehicle. It is typically determined by the vehicle’s market value, depreciation, and any additional requirement installed.
A higher IDV equals a higher premium. As the insurer who bought this comprehensive vehicle insurance policy is liable for a larger payout in case of a claim.
Comprehensive or Third-Party Insurance: Add-on Covers
Although comprehensive insurance is already a big shield, you can further upgrade your protection with add-on covers. These are optional benefits one can choose alongside their base policy to address specific needs. For example, there’s a zero depreciation cover that eliminates depreciation deductions on replaced parts during repairs. It ensures you receive the full cost.
Then we have the engine and gearbox protection cover. It will extend your comprehensive insurance coverage to these critical components. Thus, safeguarding you from expensive repairs in case of breakdowns.
While third-party insurance doesn’t offer extensive add-options like comprehensive plans, some insurers may provide you limited add-on covers like personal belongings cover or roadside assistance. However, these are typically less extensive compared to those offered with the former insurance.
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Comprehensive vs. Third-Party: Claim Settlement Process
Talking about the claim settlement process, well, the process can differ slightly for both comprehensive and third-party insurance. For third-party claims, the process is generally considered simpler. Since it involves the other party’s damages, you need to file an FIR and cooperate with your insurer’s investigation. Once done, they will handle communication and negotiations with a third party to settle the claim amount.
Comprehensive claims, however, require more involvement from you! You need to inform your insurer about the incident promptly, file a claim form, and submit important documents like FIR and repair estimates. The insurer will then arrange for an inspector to assess the damage.
Once approved, repairs can be done at a network garage for a cashless experience. Or you can choose a trusted repair shop and be reimbursed later. Keep in mind, prompt communication and proper documentation are pivotal for a smooth claim settlement process in both scenarios.
Comprehensive vs Third-Party Policy: Target Audience
Of course, it will make no sense to end our comparison blog on comprehensive vs third-party insurance without discussing this aspect! Choosing between these two types of vehicles boils down to your precise requirements and budget. Third-party insurance, being the more affordable option, might be suitable for older cars with a lower market value or for drivers with a good driving record who are less likely to file claims.
On the other hand, comprehensive insurance is ideal for new car owners (even for those with a loan or lease on their vehicle) or those who want all-around protection for their vehicle. If you are a driver who frequently parks his vehicle in areas with a high risk of theft or vandalism, you will benefit from the broader coverage offered by comprehensive insurance too!
Comprehensive vs Third-Party Insurance: Final Words
There you go!
We told you about the key differences between comprehensive and third-party insurance plan. As you can see, there’s no one-size-fits-all answer. The choice depends on your individual needs and budget. Also, remember that the most affordable option isn’t always the best. In some cases, it might leave you financially exposed in case of a major accident.
Struggling with finding the perfect vehicle insurance policy? Check out Aapka Policywala’s website! We are your one-stop platform where you can find a wide range of policies from multiple reputed insurance companies. Get started today and experience advantages i.e. transparency, convenience, and peace of mind on the road.
Call us at 8390008390 in case of queries!
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