Debunking Common Misconceptions about Third-Party Car Insurance

Posted on: Oct 22, 2024 | 3 mins | Written by: HDFC ERGO Team

Debunking Common Misconceptions about Third-Party Car Insurance

Third-party insurance is quite popular in car insurance purchases because it is legally mandatory. However, due to the extent of many myths surrounding it, many car owners fail to make educated decisions.

People who have misconceptions about third party insurance have issues with their coverage, and when it is time to file for compensation, they get frustrated. Disproving the popular assumptions surrounding the policy will clear up these myths!

Common Myths about Third-Party Car Insurance

Some of the misconceptions about third-party car insurance prevalent among people are:

1) Third-Party Insurance Covers Everything

A common misunderstanding is that third-party car insurance covers all damages, including those to your car. The reality is quite the opposite. Third-party insurance only covers damages you cause to someone else’s vehicle or property and injuries to others in an accident. If you want coverage for your car’s damages, you must opt for comprehensive car insurance.

2) Comprehensive Insurance is Always More Expensive than Third-Party

Indeed, comprehensive car insurance promises a wider scope of coverage than third-party liability coverage; however, it does not mean that the costs are always that high. Even if a consumer pays for both insurances simultaneously, their price difference will be minimal, especially after deducting the extra costs.

It is always advisable to use insurance comparison sites to check which companies have the most advanced coverage for the same car models yet at affordable prices.

3) You Don’t Need Third-Party Insurance for Older Cars

Many wrongly believe older cars don’t need insurance because they’re less valuable. This is wrong. Note that third-party insurance is not about how much your car can get but the compensation for the injuries and damages caused to third parties due to an accident involving your car.

So, regardless of your car's age, third-party car insurance remains a legal requirement and will shield you against heavy fines and legal suits in the event of an accident.

4) Third-Party Insurance is Enough for Complete Protection

Third-party insurance protects only third parties and does not compensate the policyholder for the damages to the insured car. For better risk management, one should buy comprehensive car insurance that will cover the damages to third parties and own car in an accident. It also protects against the damages caused by natural or man-made disasters and theft.

5) Third-Party Insurance is Cheaper with Any Insurer

It’s easy to assume that third-party insurance is uniformly priced across different insurers. However, while the premiums are regulated, factors like add-ons or additional services can affect the final cost. Always use a car insurance online comparison tool to see which provider offers the best deal suited to your needs.

6) You Can’t File a Claim for Personal Injuries With Third-Party Insurance

Although third-party car insurance largely defines its objective to protect third parties or their properties, it often offers the owner-driver personal accident protection. This is a talking point that is rarely made but is quite essential. However, you should explore comprehensive plans or specific personal accident policies if you want broader personal accident coverage.

7) You Don’t Need to Renew Third-Party Insurance Annually

Even though third-party insurance is compulsory, some people mistakenly believe they don’t need to renew it regularly. Let us be clear that the policy has to be renewed once a year.

The consequence of driving without insurance leads to punishment, fines, or even legal action against an automobile driver. You should always pay your premiums on time to get continued coverage. You can always renew your car insurance online with convenience.

8) Third-Party Insurance Covers Theft of Your Vehicle

This is one of the most awful misconceptions. Third-party car insurance does not cover car theft. The policy does not entitle you to claim compensation if your car is stolen. One requires comprehensive car insurance, which offers protection against theft, natural disasters, third-party liabilities, and damage to the vehicle.

9) Third-Party Insurance Covers Damages Caused by Natural Disasters

A major misunderstanding is that third-party car insurance covers damages caused by natural calamities like floods or earthquakes. In reality, the policy covers only the damages you cause to others' property. You’ll need comprehensive car insurance to protect your car from natural disasters.

10) Third-Party Insurance Automatically Transfers When You Sell the Car

When you sell a car, the third-party insurance often does not instantly transfer to the new owner. The policy you have is often related to you and your vehicle. When you sell your car, you must tell your insurance carrier to cancel the policy. The new owner of the car will need to acquire their own insurance coverage.

11) If You Don’t Drive Much, You Don’t Need Third-Party Insurance

As long as one has a car, they must have third-party car insurance, even if it will be used sparingly. Otherwise, the laws may lead to license suspension or payment of fines for non-compliance.

Conclusion

The car insurance market is complicated, and the misconceptions surrounding it don’t help. Now that we have debunked some of these myths about third-party car insurance, you can make a more concrete decision.

However, checking the policy thoroughly or shopping around for prices comparing third-party and comprehensive car insurance would still be good.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

5 Myths About Car Insurance in Indi

All you want to know about third-party car insurance

Find out why third-party insurance is necessary

5 Reasons Why Comprehensive Car Insurance Costs More Than Third Party Liability Policy

Here’s How Investing in Comprehensive Insurance is Beneficial in the Long Run