Top Reasons Why Third-Party Car Insurance Is Not Enough

Car Insurance is mandatory in India and specifically Third-Party Insurance is mandatory. According to the Motor Vehicle Act of 1988, driving without valid Car Insurance is a punishable act in India.

 

What is Third-Party Insurance?

Third-party insurance covers the insured against the loss or damage incurred to a third person’s body or property. The terms are broken down to be more clear.

 

First Party - The insured person or the policyholder.

 

Second Party - The Insurance Company.

 

Third Party- A person who is affected in an accident and claims for damage incurred by the first party to the third party.

 

So, if an insured person is held legally liable for the damages caused to the third party, then the first party or the owner is liable to pay compensation for the damage or injury caused.

 

In the event of an accident, the insured person who is liable for the accident should inform the insurance company about the accident. A claim will be filed against the first party or the owner, and the insurance company will pay the compensation to the third party. This is how Third-Party Insurance works.

 

What is the Difference between Third-Party Insurance and Comprehensive Insurance?

Third-Party insurance and Comprehensive Insurance are the most commonly purchased insurances in India. A Third-Party insurance provides coverage for damaged incurred by third parties. However, accidents can occur to anyone and you might be left without any protection.

 

So knowing the difference between the two products will help you purchase the right policy that will suit your requirements. Additionally, the right Motor Insurance will protect you financially during unforeseen events.

 

Comprehensive Car Insurance protects you against third-party damage as well as your own damage. Own Damage Insurance provides coverage for damages that occurred to the insured vehicle. Own damage covers thefts, accidents, and damages that occurred due to man-made and natural calamities.

 

Top reasons why Third-Party Insurance may not be enough

Third-party insurance is mandatory in India. However, it does not provide full protection. In case of an accident, man-made or natural calamities, Third-Party Insurance will not be sufficient. So, here is a list of reasons why Third-Party Insurance may not be enough and why Comprehensive Insurance is required.

 

Comprehensive Insurance provides extensive coverage

Comprehensive Insurance provides coverage for own damage, third-party liability, personal accident and theft. Additionally, it covers damages caused by natural and man-made calamities like strikes, fires and riots. 

 

Comprehensive insurance will also provide end-to-end coverage, and when compared to the third-party premium, the comprehensive policy premium is slightly higher. So, comprehensive coverage will give you full protection during an accident.

 

Peace of mind

Car Insurance protects a person during unforeseen events like accidental damage and other calamities. Comprehensive Car Insurance will provide peace of mind, which is invaluable.

 

Comprehensive Insurance provides Own Damage cover, which provides claim benefits even if the driver is at fault. If you do not have proper Car Insurance, like a Comprehensive policy, it can lead to high financial loss as you have to pay for the repairs from your pocket. Accidents can lead to mental stress, and don’t let financial stress add to it by not opting for proper Car Insurance.

 

Comprehensive Insurance covers against theft

It is a smart choice to insure your vehicle with Comprehensive Insurance. In case of theft, Third-Party Insurance will not provide protection. However, having a Comprehensive Insurance will provide cover against theft.

 

Optional riders

Add-ons or optional riders enhance your coverage with an additional amount apart from the premium. Some of the add-ons that enhance the coverage are Nil-Depreciation Cover (Zero-Depreciation) and Road-Side Assistance. These coverages can be customised according to an individual’s needs and will not be available in Third-Party Insurance.

 

When an individual opts for Zero Depreciation Cover, you do not need to pay for the depreciation value of the replaced or damaged part.;

 

Road Side Assistance provides coverage for insurance holders when their vehicle breaks down or has any mechanical failure.

 

Conclusion

Car Insurance is not only meant to meet legal requirements. It should cater to your needs and should provide enough protection to your vehicle. Third-Party Insurance will provide protection against third-party liabilities.

 

However, Comprehensive Insurance will provide protection for Own Damage, Third-Part Liability and theft. The right Car Insurance will protect you from hefty financial loss. Shriram Car Insurance provides Comprehensive Car Insurance at an affordable premium.

  

FAQs

1. Will Third-Party Insurance provide coverage for natural disasters?

No, Third-Party Insurance will not provide coverage for natural disasters. However, Comprehensive Insurance will provide coverage for natural and man-made calamities.

 

2. Which Insurance is better— Comprehensive or Third-Party Insurance?

Purchasing Comprehensive Car Insurance is a wiser choice as you will get the dual benefit of Third-Party Insurance and Own Damage. Apart from that, you will also stay protected during unforeseen events like natural and man-made calamities. In Third-Party Insurance, only third-party liabilities are covered, and other benefits you enjoy in Comprehensive Insurance are not covered.

 

3. Can a person have two Third-Party Insurance plans from different insurance companies?

Yes, a person can buy two Third-Party Insurance from two different insurance companies. However, that can be a violation of the rules, and only one insurance policy will be legal and can apply for claims.