Why choose a Comprehensive Car Insurance over Third-Party Liability Policy?

Securing assets is not only essential but also forms a need. Think that you and your child suffer from cold and cough for which you visited a doctor. After meeting the doctor, you will not just ask medicines for your child but also for you. Right?

full insurance

Haven’t you heard “Pehla Sukh Nirogi Kaya, Dooja Sukh Ghar Mei Ho Maya.” What we mean here is that visiting a doctor is an important requirement but asking for a child’s medicines is your responsibility. Asking for your treatment is completely your choice. Got it? Similarly, the Third-Party Liability policy is mandatory and your responsibility. Own Damage car insurance is essential but should you take it becomes your call. Let us see which is a better cover for your car?

What is a Comprehensive Cover?

The insurance policy that pays when there is a need to replace or repair the damage that has occurred in your vehicle. A Comprehensive Car Insurance Policy, in general, will offer two types of coverage that include:

  1. Third-Party Legal Liability Cover.
  2. Own Damage Cover.

Other than these, you can also extend the coverage by paying for add-on covers like Zero Depreciation, Engine Protection, Consumable Cover, Gearbox Protection, Roadside Assistance, Return-to-Invoice Cover and much more.

Under a comprehensive type of policy you can get reimbursement for losses that may arise from:

  • Accident
  • Fire
  • Theft
  • Vandalism
  • Riots
  • Damage by animals
  • Floods or another natural disaster
  • Third-Party bodily injury
  • Third-Party property damage
  • Add-On covers (as included)

What is Third-Party Liability Policy?

A Third-Party Legal liability policy pays for you when you are legally held liable for a mishap that has caused bodily injury or property damage to any other party. There is no escape from buying this type of policy as it has been made mandatory by law.

While driving your car if the traffic police identify that you do not have an insurance policy, you can be charged with a penalty of Rs.2000/- and/or can face imprisonment for 3 months.

Difference between Comprehensive Cover and Third-Party Liability Policy for car

Particular Comprehensive Cover Third-Party Legal Liability Cover
Premium It is available at a higher premium. TP Legal Liability policy comes at a low premium.
Coverage Comprehensive Cover is a package policy which offers wider coverage for own damage as well as third parties. On the other hand, the TP Legal Liability covers your legal liability for bodily injury or property damage to the third-parties.
Statutory Requirement It is not necessary to buy the Comprehensive Cover. A Third-Party Legal Liability Cover is a must-have.
Add-ons A Car Insurance Policy can be secured better with add-on covers which can be purchased under the Comprehensive Policy. No add-on cover for protection of own damage of the car can be purchased under the Third-Party Legal Liability cover.

Which is better Comprehensive Car Insurance or Third Party Legal Liability?

On your birthday, your dad gifted you a car Maruti Baleno for Rs.5.59 lakhs. He bought Comprehensive Insurance Policy for it by paying a premium of Rs. 16,000/-. Along with the package policy, he also bought some add-on covers like Zero Depreciation, Engine Protection, and Gearbox Protection.

Imagine one fine morning when there was too much fog, you were cautious but drove fast to reach office on time. You collided with a biker coming from the opposite end. The biker suffered minor injury and his bike was damaged. Your car bumper had dents and the right headlight came off. The total claim evaluated for the repairs of the car was Rs.8,000/- but for the third-party losses, the amount was summed up to Rs.12,000/-. The policy had a compulsory deductible of Rs.1,000/-. Now let us see how will the compensation be made by the insurance company when you had;

  1. Comprehensive Policy: A total compensation close to Rs.19,000 (Rs.8,000+Rs12,000-Rs.1000/-) will be made by the insurer after applying compulsory deductible. The premium paid was just Rs.16,000/- and the amount of losses incurred is more.
  2. Third-Party Policy: Under a Third-Party Legal Liability, the policy will reimburse the claimant on your behalf with Rs.12,000/- only.

Under a Third-Party Liability Only policy, you will have to bear the repair cost of your vehicle but a Comprehensive Cover pays for both. Hence, a Comprehensive Policy for your car is better as it will save you from unexpected financial as well as legal liability.

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