Difference between Comprehensive and Third Party Insurance (2024)

FAQs

What is the difference between comprehensive and third party only? ›

Third party cover will never pay for damage to your car. Fully comprehensive cover will also pay for damage to your car; although if your car is damaged by another driver and you are injured their car insurance policy will pay out.

If you want to be covered for damage to a new or expensive car, you might want a comprehensive car insurance policy. If you're only concerned about avoiding a hefty repair bill for someone else's car, third party property damage car insurance might be enough for you.

Comprehensive coverage helps repair or replace your car after something other than a collision with another car. Things like theft, fire, hail damage or hitting an animal. It's optional if you own your car outright—but since these situations can happen to any driver, it's recommended to help with costly repairs.

Third-party insurance is a form of liability insurance that covers you when someone makes a claim against you for damages. A common example of this is auto insurance, which will pay another driver who is injured in an accident that you have caused. Another common type of third-party insurance is for property damage.

Third party

This is the minimum legal requirement and covers you for damage to someone else's vehicle or property or injury to someone else in an accident. This includes accidents caused by your passenger. It doesn't cover repairs to your own vehicle.

The difference between full coverage and comprehensive insurance is that a full-coverage insurance policy includes liability, comprehensive and collision coverage. Comprehensive insurance covers damage to a car from things other than road accidents.

You'll be covered for the cost of repairs to damage to another person's vehicle or property (the 'third party'), plus any medical bills or injury compensation costs if someone was hurt in the accident. Fire. You'll be covered for the cost of repairing or replacing your car if it's damaged by fire.

If your car is damaged in a road collision with another car or object and you're at fault, only your collision coverage can help pay to repair it. Only comprehensive coverage covers losses caused by contact with animals, civil disturbances, fires, natural disasters, theft, and vandalism.

It's financially smart to keep car insurance that includes comprehensive and collision coverages on vehicles that are younger than a decade. The cost of insuring a 5-year-old car equates to 27% of the car's value. After 10 years, the annual cost of car insurance represents 35% of a typical car's value.

That includes an array of random events outside your control, from a chipped windshield or hail dent to explosions or damage from vandalism. Comprehensive insurance is optional if you own your vehicle. But if you finance or lease it, your lender will likely require it.

Is it better to have a $500 deductible or $1000? ›

If you're more likely to get into an accident, you won't want to pay out a higher deductible. However, if you're generally a safer driver, your car insurance premiums will be lower with a $1,000 deductible.

Once you've paid your vehicle off, you're no longer subject to any insurance requirements other than your state's minimums. If you want to drop some types of coverage to save money, that's up to you. Either way, have your insurer remove the lender as a lienholder on your policy.

An Example of a Third-Party Claim

Another driver runs their stop sign and hits you. You have vehicle damage, a broken arm, and whiplash. The other driver has an insurance policy that covers liability for physical injuries, including medical expenses, and property damage.

You can still claim from the other driver's insurer for any injuries or losses not covered by your own policy. These are called uninsured losses and can cover alternative transport while your own vehicle is being repaired, loss of earnings, personal injuries and the excess on your policy.

First-party insurance covers the damages or losses caused to the policyholder or his/her vehicle. Covers the damages sustained The damages can be sustained during riots, strikes, earthquakes, floods, fire, theft etc. Third-party insurance covers damages or losses caused only to the third party due to an accident.

Third-party insurance, which is also sometimes referred to as 'act-only' insurance is a statutory requirement for all vehicle owners as per the Motor Vehicle Act. It is a type of insurance cover where the insurer offers protection against damage to the third-party vehicle, personal property and physical injury.

A comprehensive plan is expensive compared to a third-party policy because it covers injuries, damages, and theft.

If you want to change the level of cover, you'll need to start up a NEW Comprehensive Insurance or Third Party Property Damage policy online, and cancel the existing policy. Cancelling within the cooling off period.