The Differences between Comprehensive and Third-Party Car Insurance Explained

When it comes to buying insurance for your car, you are supposed to consider plenty of important factors. One of these factors is the type of insurance coverage you are looking for your car. People tend to confuse between a comprehensive insurance policy and a third party insurance policy when looking for car insurance. This article will help you to understand the basic difference between both these car insurance policies:
What is a Comprehensive Car Insurance Plan?

A comprehensive car insurance plan offers complete protection against the damages to your car due to an accident or a road-mishap. This plan is called a comprehensive plan because it provides coverage for the damages to your car, third-party legal liability, theft, along with the personal accident coverage. The coverage can be boosted by selecting additional covers, such as engine protector, accessories cover, medical expenses, zero depreciation cover, etc. This cover is widely popular, as it offers full-fledged coverage and it leaves the policyholder stress-free.

A comprehensive car insurance plan includes coverage for fire, theft, natural and man-made catastrophes, such as a tornado, hurricane vandalism, damage caused to your vehicle by animals, falling objects, civil disturbance, such as a riot that causes damages to your car.
The Benefits of Purchasing a Comprehensive Car Insurance Plan

A comprehensive car insurance plan safeguards the insured vehicle against the following:

• Vandalism
• Theft
• Glass damage like as a damaged windshield
• Damages caused by a bird or an animal
• Damage caused by falling objects, missiles etc.
• Fire
• Flood
• Damages caused by a natural disaster like a wind storm, hail storm, tornado, hurricane, etc.
• Third-party liability

Without a comprehensive insurance plan, a claim can’t be filed if your car is damaged and the reason isn’t a road mishap.

Comprehensive Car Insurance Plan Exclusions

Here are the factors that are excluded from the coverage of a comprehensive insurance plan:

• Wear and tear and aging of the automobile
• Depreciation
• Mechanical or electrical breakdown
• Damages caused to tubes and tyres. In case the vehicle has got its tubes and tyres damaged because of an accident, then the liability of the insurance provider would be restricted to 50 percent of the total replacement charges.
• Damages caused by a driver driving without a valid driving license.
• Damages caused due to driving under the influence of intoxicants.
• Any loss or damage due to mutiny war, or a nuclear attack
• Third-Party Car Insurance Plan

A third-party car insurance plan provides coverage against any legal liability arising out of injuries to a third-party when the policyholder is at fault. It covers damages and injuries caused by the insured vehicle, to a third-party person or property. As per the Motor Vehicles Act, 1988, it is mandatory for every motor vehicle owner to buy at least third-party insurance coverage in India.
Benefits of Purchasing a Third-Party Car Insurance Plan

A third-party car insurance plan covers a vehicle’s owner against any legal liability, including death or bodily injury to a third party or damage to their property with the involvement of the insured vehicle. As per the Motor Vehicle Act, a third-party claim can be filed under the category of "no fault liability claims" in which the claimant is not obligatory to allege or prove the negligence on the part of the involved vehicle that has caused the accident or "fault liability claims".
Third-Party Car Insurance Plan Exclusions

A third-party car insurance plan doesn’t provide coverage for the cost of damage caused to any automobile or any belongings in the automobile if there is any accident. Along with that, it won’t provide coverage to your car or if you belongings are damaged or stolen.
Difference between a Third-Party Cover and Comprehensive Cover

The pros and cons of these two kinds of car insurance plans depend on many elements. It is crucial to understand these factors so that you can analyze, compare, and then make a wise decision.

1. The Value of a Car
In case the value of your vehicle is low, it’s recommended to buy third-party insurance only, as the repairs to the damages could be managed very easily. It is economical to pay the repair bills as compared to paying for the high premium of a comprehensive insurance cover.

On the other hand, if your car is new and expensive, it is recommended to buy comprehensive insurance coverage.

2. Coverage
A third-party insurance plan provides coverage against the damages to any third-party vehicle and bodily injuries caused to any third party due to an accident. There are a few insurance providers that charge a little extra for third-party coverage. It doesn’t provide any coverage against the damages caused to your own vehicle.

In case you’re seeking coverage for your vehicle, you should buy a comprehensive car insurance plan. It offers a wide coverage, as it includes third-party liability as well. A comprehensive plan is expensive as compared to a third-party insurance plan, as it offers broader coverage.

3. Expenses
A comprehensive plan is expensive as compared to a third-party plan because it offers coverage for injuries, damages, and theft.

It is good to be safe than sorry. A road mishap is unfortunate and it can wash out your savings in one go. There can be minor variations when it comes to the exclusions and benefits, as it varies insurer to insurer. If you want the peace of mind and the right insurance coverage for your vehicle at the same time, then you should buy a comprehensive car insurance plan since it will fulfill all your insurance expectations.

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Soure: https://www.policybazaar.com/motor-insurance/car-insurance/articles/comprehensive-and-third-party-insurance-difference/

5 Factors Affecting your Car Insurance Premium you could be Missing

There are times when despite owning the same vehicle and having the identical parameters, your friend next door and you pay different amounts for your respective car insurance premiums. Now, you must be wondering why? This article will help you in understanding what the factors are that affect your car insurance premium.

Not just one but many factors are considered while calculating your car insurance premium, particularly at the end of auto insurance providers. Two of the most important factors are your Voluntary Deductibles and making a decision for a low insurance coverage.

Apart from these two factors, your auto insurance premium is affected by various other factors as well. Knowing such factors can be very helpful for you to make a wise decision.

Below mentioned are 5 significant factors that affect your auto insurance premium:

1. Geographical Location
Your area of residence reflects your lifestyle since you share a direct relationship with the location. The city of your vehicle registration influences the premium you will have to pay for your auto insurance. Insurance providers have classified various locations across the nation as the 'Insurance Zones' basis the automobile’s exposure to the risk associated with your location.

Generally, these zones are the metro cities along with the rest of India. In metro cities, there is a high rate of accidents and vandalism. In case you are residing in a metro city, then you will have to pay a higher premium for your car insurance as compared to someone who is living in a less developed and lesser populated city.

For example, if you purchase an auto insurance plan with zero depreciation add-on for your brand new car in a semi-urban locality, you would have to pay 3 percent to 5 percent less as compared to purchasing the exact plan in a metro.

2. Kind of Insurance Cover
There are two types of car insurance plans - third-party car insurance and comprehensive car insurance. In the former, the coverage is applicable only for the damages caused to a third party involved in any road mishap. It doesn’t provide any insurance coverage to vehicle owner/driver or the insured vehicle.

In the latter, the insurance coverage is provided for the damages done to both the parties involved in any road mishap, including your own automobile.

There are people who go for the third-party insurance coverage, as its premium is lower when compared to that of a comprehensive insurance plan. For instance, for a new Hyundai i10 GLS Asta, the third-party insurance premium would cost somewhere between Rupees 3,200 to Rupees 3,500. The insurance premium for a comprehensive policy for the same four-wheeler would cost somewhere around Rupees 10,000 to Rupees 15,000. The specific calculation depends upon the add-on riders you opt for.

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3. The Type of Engine
The vehicle insurance premium is calculated on the basis of two elements - third-party coverage and own damage coverage. The calculation of third-party cover is based on the cubic capacity (cc) of your vehicle’s engine. The computation of own damage cover is based directly on the Insured Declared Value of your vehicle. In simple terms, the insurance premium amount for a 1000 CC engine vehicle would be lesser than that of a vehicle with 1500 CC engine.

4. Extra Layers of Security
You brought an insurance plan in order to safeguard your vehicle from the possible risks. If your vehicle is equipped with security devices, such as gear lock, handle lock, airbags, GPS tracking device etc., the risk of your vehicle being stolen decreases drastically. Insurance providers consider your efforts towards ensuring the security of your car while calculating the insurance premium. It might offer you a discount on the own damage premium.

Keep in mind that this discount would apply if the installed security equipment is authenticated by the Automotive Research Association of India.

5. Car Modification
Generally, car accessories like roof rails, spoilers etc. aren’t covered in the car insurance plans. In case you want insurance coverage for that as well, get it installed by your car dealer when you purchase it. Your car dealer would include the charges of such accessories in the price of your vehicle. It would be helpful for you in order to get a high Insured Declared Value from your insurance provider.

At the same time, keep in mind that it would hike your car insurance premium.

A car insurance plan is for a specific duration; it’s recommended to do a research about these 5 important factors that affect your car insurance coverage before you finalize an insurance plan for your car.

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