Why is Comprehensive Car Insurance More Expensive Than Third-party Insurance?

The cost of Comprehensive Insurance is expensive because of its coverage, the risk profile of the insured vehicle, and the claim percentage. So, it is important to understand the coverages of Comprehensive Insurance and Third-Party Insurance before purchasing.

 

Understanding Third-Party Car Insurance

Third-Party Insurance is mandatory under the Motor Vehicle Act, 1988. Third-Party Insurance covers any damage, injury or death caused by the policyholder to the third party. Third-Party Insurance is the basic insurance and does not cover any damages that occurs to the insured car. It only covers liabilities for third parties. Additionally, Third-Party Insurance will take care of financial and legal assistance.

 

Understanding Comprehensive Car Insurance

Comprehensive Insurance covers third-party damages and losses to the insured car caused by natural and man-made calamities, such as riots, strikes, and theft.

 

In a Comprehensive Insurance, the risk covered is high and the coverage is also extensive when compared to the Third-Party Insurance. Apart from the coverages, an individual can enhance their policy with the required add-ons.

 

Why is Comprehensive Insurance More Expensive?

Comprehensive policy is expensive when compared to Third-Party Insurance as Comprehensive Insurance provides more coverage options. When an individual does not have Comprehensive Insurance, all the responsibility of repairing a damaged car burdens a person financially. It not only provides financial support but also lets you be at peace that your vehicle is covered extensively. Some of the reasons why Comprehensive Insurance is expensive are briefed below.

 

Coverage

The Comprehensive Insurance being slightly on the expensive side is due to its coverages. As mentioned earlier, Third-Party Insurance only covers third-party liabilities and damages. On the other hand, Comprehensive Insurance will cover both Third-Party liabilities and damages that occurred to the insured vehicle.

 

Shriram Motor Insurance provides Comprehensive Insurance and covers perils like floods, earthquakes, typhoons, hurricanes, storms, tempests, inundations, cyclones, hailstorms, frosts, landslides and rockslides. It also covers man-made calamities like strikes, riots, malicious acts and terrorist activities. Having a Comprehensive Insurance will not cause any financial burden during such unpredictable situations.

 

Customisable Add-ons

In most cases, Third-Party Insurance is a standard policy, and deviations aren’t possible. However, when it comes to Comprehensive Insurance, the policy can be customised according to an individual’s needs.

 

Customisable policy improves the coverage, and an individual can opt or strike out certain options according to their needs. With these customisable add-ons, Comprehensive Insurance can become expensive.

 

Age of the car

It is one of the important factors that determines the premium of a Comprehensive Car Insurance. As the car ages, the premium also increases. These things can make Comprehensive Insurance expensive.

 

Model of the car 

A Comprehensive Insurance premium will be calculated depending on the model of the car. The more expensive the car, the premium will be more. The repair and the replacement of such higher end-cars cost high, which impacts the premium of the car.

 

Protection against theft

Comprehensive Insurance provides coverage against theft, whereas Third-Party Insurance will not provide such benefits. This also leads to an increase in the premium of the insurance.

 

Choosing Between Third-Party and Comprehensive Coverage

Third-Party Insurance and Comprehensive Insurance has its own advantages. However, Comprehensive Insurance will cover third-party liabilities, own damage and theft. So choosing Third-Party Insurance will only third-party liabilities whereas Comprehensive Insurance will cover all the things that are mentioned above.

 

Additionally, Comprehensive Insurance allows you to choose the add-ons that will cater your needs and makes your coverage complete. So, it is a wise choice to go for Comprehensive Insurance.

 

Conclusion

Comprehensive Insurance is slightly expensive when compared to the Third-Party Insurance as it provides complete coverage. Third-Party Insurance has limited coverage so it is affordable, whereas Comprehensive Insurance provides extensive coverage, which is slightly costly compared to other insurance.

 

Shriram General Insurance provides Comprehensive Insurance and Third-Party Insurance. So an individual can choose between these two policies according to their coverage required. Additionally, Shriram General Insurance provides add-ons like Key Replacement Cover, Engine Protection Cover, Zero-Depreciation Cover and Insured Declared Value. These add-ons help customers to choose their add-ons, which will enhance their coverage.

 

FAQs

1. Is it possible to switch from Third-Party Insurance to Comprehensive Insurance?

Yes, you can switch from Third-Party to Comprehensive Insurance while renewing your car insurance.

 

2. Is it mandatory to drive a car with Third-Party Insurance?

Yes, driving a car with Third-Party Insurance is mandatory by law.

 

3. Does Comprehensive Insurance cover third-party liabilities?

Yes, Comprehensive Insurance covers Third-Party Liabilities.