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.
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
THIRD PARTY INSURANCE (in case of an accident due to policyholder’s fault, causing damage to another vehicle)
How to decide upon the kind of insurance
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
ADS BY GOOGLE
Ask the Experts
Get your Personal Finance queries answered