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Jan 22, 2014, 12.13 PM IST | Source: Moneycontrol.com

Check out: 3rd party motor insurance vs comprehensive cover

Buying a car is always a major life event. Whether you are buying a used car or a brand new, expensive car, you will invest a lot of your time and of course money to ensure you get the best deal.

Deepak Yohannan
MyInsuranceClub.com

Since a car is such a precious possession, we always try to keep it safe. Therefore motor insurance is not only mandatory, it is also a complete necessity. However, you have to be careful while selecting the kind of motor insurance as different categories cover different needs. There are primarily two kinds of motor insurance – third party insurance and comprehensive insurance and while deciding which one you want, you must be clear about the advantages of each as well as your own requirements. Take a look at this article to get a comparison of both.

The two kinds of motor insurance:

Like mentioned above, motor insurance is broadly categorized into two parts – third party and comprehensive. Let us understand what each stands for.

a) Third party motor insurance – Third party motor insurance is a basic insurance that will cover the damages caused due to your fault to another vehicle and its passengers. Under this kind of a plan, your vehicle will not be covered.

b) Comprehensive motor insurance – Comprehensive motor insurance covers the damages caused to the third party vehicle as well as to your vehicle, in additional to the damages caused to the passengers in both vehicles. Your vehicle is also covered for any damage resulting from fire, theft, accident, natural calamities and so on.

What they cover
To understand what each type of the above mentioned insurance policies cover, take a look at the tables:

THIRD PARTY INSURANCE (in case of an accident due to policyholder’s fault, causing damage to another vehicle)

Kind of Damage Protection
Own vehicle ×
Other vehicle
Injury to self ×
Injury to passenger in own vehicle
Injury to driver of other vehicle
Injury to passenger in other vehicle
Damage to own vehicle due to fire ×
Damage to own vehicle due to attempted theft ×
Theft  ×

COMPREHENSIVE INSURANCE 

Kind of Damage

Protection

 

 

Own vehicle

Other vehicle

Injury to self

Injury to passenger in own vehicle

Injury to driver of other vehicle

Injury to passenger in other vehicle

Damage to own vehicle due to fire

Damage to own vehicle due to attempted theft

Theft

 

How to decide upon the kind of insurance
There are a few things you need to consider when deciding what kind of insurance you want. First, you need to see the value of a car. If your car’s value is low, you can settle for a third party motor insurance. This is because even if your car is damaged, you can get it repaired easily. You may actually find it cheaper to pay for the damages than pay the high premiums of the comprehensive cover. On the other hand if your car is expensive, you must go for a comprehensive cover.

A comprehensive motor insurance is more expensive as it covers a wider number of damages. So if you opt for this kind of insurance, you are bound to shell out more money, but your vehicle will be protected against almost all kinds of damages.

The author is the CEO of MyInsuranceClub.com

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