Difference between third party and comprehensive car insurance

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04 Aug 2023

Know what third-party liability & comprehensive car insurance & what,s the difference between them & which insurance you should buy. For more information, check out the car insurance from Kotak General Insurance.

In India, when you buy a car insurance policy, you have two options to choose from – Third party liability and Comprehensive policy. If you are a first-time insurance buyer, and not sure which insurance to buy, then knowing the difference will help you make the right choice.

What is third party liability car insurance?

Third party liability car insurance is the most basic of insurance. It helps you get financial protection against damages you may cause to the third-party’s vehicle, property, and physical injuries in an accident.

As per Motor Vehicles Act, 1988, all car owners in India must compulsorily have at least a third-party liability insurance; driving without it is a punishable offence, and you may have to pay a hefty fine.

What is comprehensive car insurance?

As the name suggests, comprehensive car insurance offers coverage against both third party liabilities and own damage. Apart from accidents, comprehensive insurance also covers damages due to natural calamities, man-made disasters, fire, and theft. Also, if you have a comprehensive car insurance policy, you can purchase add-ons and get additional coverage against specific risks that are not covered under the regular policy.

Now that you know what third-party liability and comprehensive car insurance is, let us understand the difference between the two.

Premium

The premium for a third-party liability car insurance is lower than comprehensive policy as the coverage you get is limited. In contrast, the premium for comprehensive car insurance is higher as you get wider coverage.

Typically, the insurance companies determine the premium based on specific factors like the type and model of the car, year of manufacturing, engine CC (cubic capacity), the add-ons you have opted for, etc.

Customisations

With third party liability car insurance, you cannot customise your plan. However, if you purchase a comprehensive policy, you can customise the plan by adding specific add-ons, such as engine protection cover, daily car allowance, loss of belongings, depreciation cover, etc.

NCB (No Claim Bonus)

No claim bonus is a discount or reward that the insurance companies offer to certain policyholders who do not raise a single claim during the policy year. You can use the accumulated NCB to get a discount on the premium when you renew your insurance in the subsequent year. Some insurance companies offer up to 50% NCB if you don’t file a claim for five consecutive years. NCB is offered only on the own damage portion of the comprehensive car insurance policy. If you have third party liability insurance, you cannot avail NCB discount.

Other benefits

You can get attractive discounts on the premium to comprehensive car insurance policyholders who have anti-theft devices in their car or opt for voluntary deductibles. The anti-theft devices you install must be approved by ARAI (Automobile Research Association of India). There is no such special discount available on third party liability car insurance.

Which insurance should you buy?

If you don’t drive your car regularly, and want a basic insurance cover with an affordable premium, third party liability insurance will be an ideal choice. It will help you be compliant with the law.

A comprehensive car insurance policy offers wider coverage. Although its premium is little higher than a third party liability plan, it will help you save a significant amount if you meet with an unfortunate accident. Besides, you get the flexibility to choose add-ons and the benefit of NCB.

So, comprehensive car insurance has an edge over third party liability insurance.

Get the best insurance cover with Kotak General Insurance

If you are looking for the best comprehensive car insurance policy, you can consider Kotak Car Secure from Kotak General Insurance. You can buy car insurance online, and it comes with a host of benefits like up to 50% NCB, access to 4000+ cashless garage network across India, 24-hour assistance, etc. Visit our car insurance page today to know more about the plans and the features.


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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.