Comprehensive vs third-party car insurance

Know the difference between a comprehensive and third-party car insurance policy to choose the right car insurance policy.
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Which is better, buying a comprehensive or third-party car insurance?
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2 mins
10-May-2023

Comprehensive and third-party car insurance policies are the two most popularly bought motor insurance policies in India. Knowing the difference between these two types of car insurance policies will help you choose the right policy that suits your requirements. Having the right kind of motor insurance policy will keep you financially equipped for any emergency.

What is the difference between comprehensive and third-party insurance?

The main difference between third-party and comprehensive insurance is the type of coverage offered. While third-party insurance only protects you against third-party damage and losses, comprehensive car insurance protects you against your own damage.

In India, choosing the right type of vehicle insurance is important. After all, obtaining at least basic insurance that covers third parties is mandated by law. Not having one could end in fines for traffic violations and possibly a suspension of your driver's licence!

What is third-party car insurance?

A third-party car insurance policy is mandatory for all car owners. It covers damages caused to a third party or their property due to an accident involving the insured car. IRDAI fixes the third-party insurance premium every year, depending on the engine's cubic capacity. Driving without a valid third-party car insurance policy can lead to heavy traffic penalties and even imprisonment.

Hence, every car owner must buy/renew third-party car insurance to drive on Indian roads. However, third-party insurance does not extend coverage for a policyholder's own vehicle damages or physical injuries.

What is a comprehensive car insurance policy?

A comprehensive car insurance policy combines the advantages of a third-party policy and own damage plan. You get extensive financial coverage against third-party liability and own damages in case of an accident. The policy also covers the insured against personal accidents.

You also have the benefit of choosing additional covers to enhance your car insurance policy. You can choose from covers such as engine protection, consumables, zero depreciation, and roadside assistance. 

Difference between comprehensive and third-party car insurance

Here is a quick look at the difference between third-party car insurance and comprehensive car insurance:

Features

Third-party car insurance

Comprehensive car insurance

Coverage

A third-party car insurance plan covers expenses incurred due to damages caused to the third party. Covers damages caused to their properties or vehicles, or persons by the insured car.

You get coverage beyond third-party liabilities.

Add-on cover

Add-on coverages are not available.

Avail of various add-on facilities like zero depreciation cover,roadside assistance cover, and more with this policy.

Legal requirement

Third-party insurance is a legal requirement to ply on Indian roads.

It is not a mandatory requirement.

Calculation of premium

The premium amount depends on the cubic capacity of the engine, and IRDAI revises it annually.

The premium of such insurance policies depends on the IDV and other factors like the make and model of the vehicle, etc.

Premium cost

The premium cost is lower than comprehensive plans.

The premium cost depends on the coverage chosen.

Policy exclusions

Third-party car insurance does not cover damages caused to you or your vehicle.

The policy does not cover damages caused to your vehicle if an accident occurs under the influence of alcohol, negligent driving, or driving without a licence.


Now that you know about what comprehensive car insurance and third-party car insurance policies are, make an informed purchase decision based on your requirements.

What should you choose: Comprehensive or third-party insurance?

You should evaluate between third-party insurance and comprehensive car insurance based on the coverage and protection you need for your vehicle.
Consider a comprehensive car insurance policy if you bought a new car and use it regularly. You get substantial coverage and additional benefits at an affordable premium.

Frequently asked questions

Is third-party insurance better than a comprehensive policy?


Third-party insurance offers coverage only for third-party liabilities, whereas comprehensive policy gives extensive coverage. A third-party car insurance policy gives basic financial coverage to you. You only get coverage against third-party liabilities. It covers damages caused to a third party’s property or vehicle. Also, it covers any injury or death to the third party in an accident where you are at fault.Third-party insurance does not cover any damages caused to your vehicle or you. For that, you need to get a comprehensive car insurance policy to stay fully covered. A comprehensive car insurance policy covers damages caused to your insured vehicle as well as to a third party. The policy also offers personal accident cover for owner-driver up to Rs. 15 lakh.

Which is the best insurance for car: third party or comprehensive?

Third-party insurance offers basic financial coverage to the policyholder. You get coverage for third-party liabilities like damages caused to a third party or their property or vehicle. A comprehensive car insurance policy gives you a holistic coverage. You get coverage for damages caused to your own vehicle and to third party. You can choose any type of car insurance policy based on your requirements. Consider an insurance policy that gives full financial coverage during emergencies.

What is the key difference between comprehensive and third-party insurance?

The main difference between comprehensive and third-party insurance is the coverage offered. A third-party insurance covers only the damages caused to the third party and their property or vehicle. Whereas comprehensive car insurance covers both own damage and third-party liabilities. You can also get add-on covers on comprehensive policies, unlike third-party insurance.

Does a comprehensive car insurance policy also include third-party insurance?

Yes, a comprehensive car insurance policy includes benefits offered under third-party insurance. Comprehensive policies cover both own damage and third-party liabilities. You get coverage for any injuries or damages caused to a third party or their property or vehicle.

Why is comprehensive car insurance policy more expensive than a third-party insurance policy?

A comprehensive car insurance policy offers extensive coverage. The policy covers damages caused to the policyholder’s vehicle as well as to a third party. You also get coverage for personal accidents. Third-party car insurance policy covers only third-party liabilities. IRDAI fixes the premium of third-party insurance. Hence, comprehensive car insurance comes at a higher premium than a third-party insurance policy.

Which is better comprehensive and third-party insurance?

A comprehensive insurance policy provides a holistic coverage for your vehicle, including damage caused by accidents, theft, and other incidents. Third-party insurance provides coverage only for damages or injuries caused to third parties in an accident.

Do I need both comprehensive and third-party insurance?

It depends on your personal preferences and circumstances. If you can afford it, fully comprehensive insurance offers a more comprehensive protection. However, if you want to keep costs low, third-party insurance may be the better option.

Which is cheaper: third party or comprehensive insurance?

Third-party insurance is usually cheaper than fully comprehensive insurance because it provides only third-party coverage. However, the cost of insurance also depends on factors, such as the type of car you drive, your age, driving history, and location. It is best to compare quotes from different insurers to find the best coverage and prices for you.

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Disclaimer

Bajaj Finance Ltd. (BFL) is merely a distributor of third party products from Assistance Services providers such as CPP Assistance Services Pvt Ltd, Bajaj Finserv Health Ltd.(BFHL), AWP Assistance India Pvt. Ltd. (Allianz), Doc Online Health India Pvt Ltd. etc. Issuance of the product is at sole discretion of Assistance Company or Services provider . The product and services or benefits assured under the product shall be governed by respective partner’s product T&C’s and BFL does NOT hold any responsibility for the issuance, quality, serviceability, maintenance and any claims post sale. Your purchase of an assistance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any product. For more details on terms and conditions, inclusions and exclusions please read the product sales brochure carefully before purchase or subscription. All product information such as membership fees, benefits, exclusions, value added services, etc. are authentic and solely based on the information received from the respective value added service provider or Assistance company.

Note – While we have made all efforts and taken utmost care in gathering precise information about the products, features, benefits, etc. However, BFL cannot be held liable for any direct or indirect damage/loss. We request our customers to conduct their research about these products and refer to the respective product’s sales brochures before concluding their sale.