There are several key factors that come into play when you have to choose a car insurance scheme. One such point of concern is deciding whether to choose a comprehensive car insurance scheme or a standalone third-party car insurance scheme. In India, insurers sell both comprehensive covers and standalone third-party covers. While comprehensive motor policies cover both personal damages and third-party liabilities, standalone third-party car insurance cannot be used for own personal damages.
What Is Comprehensive Car Insurance Coverage?
A comprehensive policy, as the name suggests, offers overall protection against damages to both parties involved in an accident. This scheme is extensive, and it covers damages to car, theft, legal liability to third-party, and personal accident cover. The policy coverage can be further improvised by opting for add-ons like accessories cover, engine protector, zero depreciation cover, medical expenses, etc. This coverage is highly popular since it offers end-to-end coverage and hence ensures less stress for the policyholder.
Without a comprehensive insurance cover, you risk paying from your pocket for expensive repairs of damages following an accident. Comprehensive car insurance in India is often costlier than standalone third-party insurance cover. However, it provides a lot more benefits to the insured compared to standalone third-party covers.
Comprehensive car insurance often includes coverage for: theft, fire, natural disasters like a hurricane or a tornado, vandalism, falling objects, Damage done to your car by animals, civil disturbance, like a riot that results in damage or destruction of your car.
Essential Components Of Comprehensive Car Insurance Policy
A comprehensive car insurance policy is the highest form of protection you can buy for your vehicle. It is always recommended to have comprehensive insurance even though the law does not mandate it. With a comprehensive insurance plan, you can be rest assured that the potential losses due to accidents are easily taken care of. Some of the essential components of comprehensive car insurance are as follows:
- It provides protection against damages from accidents, even if you are at fault.
- It provides end-to-end protection for a vehicle even against theft or damages caused by natural disasters.
- Add-on covers like zero depreciation and engine protection are also available along with comprehensive insurance covers.
- No additional premium is required for covering third-party liabilities in the case of accidents.
Reasons to Upgrade to Comprehensive Car Insurance
Comprehensive is also known as “other than collision” coverage because it normally includes coverage for:
- Glass damage (such as a broken windshield)
- Damage sustained from hitting an animal or bird
- Damage from falling objects or missiles
- Fire incidents
- Damage sustained due to severe weather or natural disaster -- such as windstorm, hail, hurricane, tornado, etc.
- Damage to a third party.
Without comprehensive coverage, a car insurance claim cannot be made if your vehicle receives damage that is not due to collision. For high valued cars, this type of insurance is desirable as an additional protection.
Comprehensive Car Insurance Exclusions
- Aging, wear and tear, etc. of the vehicle
- Electrical or Mechanical breakdown
- Damage to tyres and tubes. However if the vehicle is damaged at the same time, liability of the company will be limited to 50% of the replacement cost.
- Damage caused by a person driving without a valid license.
- Damage caused due to drunken driving or driving under the influence of drugs.
- Loss/ damage caused by war, mutiny or nuclear risk.
Third-party Car Insurance
Third-party car insurance offers cover against any legal liability to a third party caused when you are at fault. It covers any damage or injury caused by the insured, to another person or property. A third-party liability cover is made mandatory in India under the Motor Vehicles Act, 1988. There is no specific limit on the liability coverage for injuries or death of a third party. However, liability coverage for property damages sustained by a third party is capped at Rs.7.5 lakh.
Benefits Of Buying Third-party Car Insurance
This type of car insurance covers the owner in case of any legal liability owing to death or injury to any individual or damage to any property caused by the insured vehicle. The Motor Vehicle Act stipulates that a third-party claim can be made under the categories of "no fault liability claims" where the claimant is under no obligation to allege and prove negligence on the part of the vehicle that caused the accident or "fault liability claims".
Third-party Car Insurance Exclusions
Third-party only car insurance policy does not cover the cost of damages to a vehicle or the belongings in the vehicle in case of an accident. It will also not provide cover if your car or belongings are stolen or destroyed.
Difference Between Third-party & Comprehensive Cover
One major difference between third-party insurance and comprehensive insurance is the range of protection offered to you and your vehicle. While a comprehensive plan provides multiple protection covers for you and your vehicle, a third-party cover is limited to offering protection against the claims of a third party. The strengths and weaknesses of these two types of car insurance depends on several underlying factors. It is necessary to better understand these variables in order to compare, analyze and decide upon the right car insurance scheme.
- Value of the car: If value of your car is low, it is better to take third-party motor insurance since repairs to damages caused can be managed cost-efficiently and easily. It is cheaper to pay for repairs when compared to paying the high premiums associated with comprehensive cover. However, if the car is brand new and expensive, comprehensive cover is the better option.
- Coverage: Third-party insurance covers damages to third-party vehicle, injuries caused to other people in an accident, as well as damage to third-party property. Some companies charge extra for third-party property coverage. This coverage has become a priority these days since cost of repairing damages to the car is high. But it does not provide you any coverage against damages to your own vehicle.
- Expense: A comprehensive cover is more expensive than a third-party cover since it provides coverage for a wide variety of damages/injury/loss.
What Insurance Cover Is Right For You?
If what you are looking for is coverage for yourself and your vehicle, a comprehensive car insurance policy is what you need. It is a wider coverage plan since it has provisions for third-party as well. Comprehensive coverage policy is expensive as compared to just third-party insurance cover. In the end, choosing the right insurance cover comes down to your specific requirements. If you own a new, high-end car, it is a good idea to have a comprehensive cover that offers maximum protection for your vehicle. You can also choose additional covers like engine protection to ensure that your vehicle is well-protected. A standalone third-party cover could be opted for old vehicles that are no longer in prime condition.
It is better to be safe, than sorry. Accidents happen unexpectedly, and it can heavily weigh on your finances. There might be slight variations in the benefits and exclusions depending on the insurance agency and it is advisable to check the terms and conditions in detail before taking a policy. To attain peace of mind when it comes to getting the right coverage, take a third-party or comprehensive insurance that meets all your requirements.
Car Insurance Articles:
Keep these points in mind when buying a new car and insuring it
As the eagerly awaited festive season approaches, you will be showered with a slew of discounts and offers from car manufacturers and insurance companies. So, if you already have plans to purchase a new set of wheels in the near future, this is the best time to do it.
However, there are certain things you should keep in mind when buying a new car and insuring it. This includes assessing your needs and understanding the coverage offered by the assortment of insurance products available in the market.
This page enlightens you on the various aspects of buying a car and an appropriate auto insurance policy. Use this as a checklist when you start shopping before the holidays.
Safeguard your vehicle with the return to invoice cover in car insurance
Did you know that the coverage offered by a comprehensive car insurance policy is not as exhaustive as the name indicates? There are several exclusions under a comprehensive/package policy, and some of these can be added to the coverage through the use of add-on covers.
Add-on covers are car insurance riders that can be bought from the insurance company at an extra cost. These riders offer specific levels of protection to the insured car and can be opted to suit the unique insurance needs of the customer.
One such add-on cover is the return to invoice (RTI) rider. Consider a scenario in which your vehicle meets with an accident that causes total damage to it. The car insurance company is liable to pay you the Insured Declared Value (IDV) of the vehicle as the maximum claim amount. But if the car was protected with the RTI cover, then you will receive the original invoice value of the vehicle, i.e., its on-road price at the time of purchase!
This page gives you a detailed insight on this extremely attractive rider.
What new car warranties are all about
The festive season is closing in on us, and it brings a tide of discounts from car manufacturers and insurers alike. If you have plans to buy a new car in the near future, do not delay it any further. The festive season is the best time to get your dream car and also save some money in the process.
Car manufacturers today offer warranties that protect engine, transmission, and other powertrain components for an extended period of time. This is completely unlike the warranties offered traditionally.
There are also certain exclusions with respect to warranties. This page elaborates on the new car warranties and the steps you need to take to ensure that you are abreast of the fine print in the owner’s manual.
Driving safely on Indian roads
There are few places in India that are more dangerous than the roads. The enormous volumes of vehicles using the roads and the lack of adequate infrastructure has led to bad driving habits and traffic congestion. The statistics of accidental deaths in the country are appalling.
The best way to make the roads safer is by practising defensive driving techniques and following road safety guidelines.
This page elaborates on how you can equip yourself to be a better driver on Indian roads. It also gives you tips on time management and getting your vehicle updated with adequate safety features.
Case study - reading through the policy documentation
When you buy an auto insurance policy, it is imperative that you read through the fine print of the policy documentation in detail. This equips you better to take the right steps at the time of a claim under car insurance. Also you will be aware of the exclusions under the plan, so that you are not disheartened at the time of a claim.
We have a host of case studies on the website that illuminate the necessity of understanding the coverage under your plan. This is one such case study.
GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017
News About Third Party VS Comprehensive Car Cover
Tata plans to launch Q501 SUV in 2018
Tata Motors is currently planning the launch of its Q501 SUV model in the year 2018. This SUV will be built on the Freelander 2 platform, and it will be available in both 5-seater and 7-seater versions. It is most likely to feature an all-wheel drive. It is also expected that this vehicle will be available in both petrol and diesel variants.
Tata already has a few models of SUV in its lineup with the likes of Hexa and Safari Storme. Another model of subcompact SUV named Hexon is also ready for launch soon. In addition to this, Tata also own Jaguar Land Rover, which is known for making high-end luxury utility vehicles.
21st September 2017
Get Adequate Insurance Cover for Your Vehicle This Monsoon Season
Having a good vehicle insurance cover is important for every vehicle owner. Vehicle insurance becomes even more important during the monsoon season when vehicles are prone to damages from rains. The recent floods in Mumbai and Chennai are examples of what could happen when rains get worse during the monsoon season. During unexpected floods, vehicles suffer a great deal of damage and it costs a lot to repair them.
According to Manohar Bhat, Chief Business Head-Motor at Bajaj Allianz General Insurance, it is necessary to have adequate vehicle insurance cover during the monsoon season. For customers using high-end cars, it is better to have engine protection add-on during the monsoon season to minimise damages due to unforeseen events.
If you already have insurance cover for your vehicle, you must check with your insurer to understand the type of protection you have for your vehicle. By getting the right cover, you can minimise the costs associated with vehicle damages during monsoons.
18th September 2017