How to Choose the Best Car Insurance Plan for Your Vehicle?

Posted on: Jul 29, 2022 | | Written by:

How to Choose the Best Car Insurance Plan for Your Vehicle?

There are different types of car insurance plans that offer various degrees of coverage. You need to know the scope of coverage available under all types of motor insurance to find the plan that best matches your requirements. The different types of car insurance include the third-party only policy, the own damage policy and the comprehensive car insurance policy. Take a look at this article to know more about the different types of motor insurance and then decide which plan is best suited for you.

What is a Third-Party Car Insurance Policy?

Third-party car insurance, as the name suggests, only offers coverage for third-party damages. If your vehicle meets with an accident leading to damage to a third-party vehicle, property or any injury to a third party, you will be liable to pay for the damages. This is where the insurance cover comes in handy. You get the following covers:

1. Damage to third-party property

You can get compensated when your vehicle damages a third-party property. The insurance company will directly settle the claim with the third party, and you don't have to worry about any hassles along the way!

2. Damage to third-party vehicle

This is the most common type of cover available under a third-party plan - compensating a third party's vehicular damages. When your vehicle ends up damaging another vehicle on the road, either partially or completely, you are legally liable to pay for the damages. With the third-party plan in place, the insurance provider pays the third party on your behalf and you are spared the financial challenges of having to do so.

3. Bodily injury or death to third-party

If you end up injuring a third party in an accident, your insurer will compensate him for the medical expenses. Also, if a third party dies in an accident, the insurer will pay a death benefit to his nominees.

4. Legal cover

If a court case is initiated in a road accident-related incident, you will get compensated for the legal costs.

It is important to note that a third-party car insurance policy doesn't offer any compensation for damages to your vehicle.

What is an Own Damage Car Insurance Policy?

Third-party-only car insurance plans are compulsory in India. However, you won't get coverage for yourself and your vehicle under such a plan. For this, you need to have your own damage cover. When you buy this plan, you get the following:

1. Damage to vehicle

This is the best and the most significant cover available under the own damage plan. If your car gets damaged in a road accident, you can make a claim and get compensated for the damages. Cashless claims are also available in most of these plans, making it all the more convenient for you.

2. Fire loss

Fire accidents are quite common in vehicles. These happen due to various reasons, such as mechanical faults, overheating, riots, etc. If your car gets totally or partially damaged in a fire, you can make a claim under your own damage car insurance plan.

3. Theft cover

A car is a prized possession, and you would never want to see it get stolen. Sadly, car thefts happen from time to time, which is why you need insurance cover to ensure you get compensated if such a thing happens to you. Buy your own damage plan, and you will have this cover under it.

As you can see, the own damage car insurance plans offers a well-rounded and wholesome cover for your vehicle. However, you cannot make any third-party claims under this policy. Thus, buying your own damage plan is a good idea if you already have an existing third-party car plan.

What is a Comprehensive Car Insurance Policy?

Quite simply put, a comprehensive motor insurance plan combines the covers available in the third-party plans and the own damage plans. Hence, they are called comprehensive plans. When you buy a comprehensive policy, you get coverage for your vehicle while having the mandatory third-party cover. The comprehensive plans are extensive in nature and provide 360-degree protection to you, your vehicle, and others.

Differences between Comprehensive Car Insurance & Own Damage Car Insurance

Here are the main points of difference between the two types of car insurance - comprehensive and own damage:

● Scope of cover

The comprehensive plans offer both third-party covers as well as own damages covers under an all-inclusive motor insurance umbrella. On the other hand, the own damage plans only pay for damages to the policyholder’s own vehicle.

● Cost

The premium of the comprehensive plans is higher than that of the own damage plans. This is because the former offers a greater number of covers as compared to the latter.

● Legal expenses

If you are dragged to court by a third party following a road accident, the comprehensive plan will compensate you for the legal expenses, as all third-party claims are covered in a comprehensive policy. However, in the own damage plans, there is no third-party cover, so you won't be eligible for the coverage of the legal expenses. This is another major difference between the two types of motor insurance.

These are the main ways a comprehensive car insurance policy differs from its damage cover. Be sure of what you need and get the right policy.

Conclusion

As you can clearly see from the points mentioned above, there are some very distinct differences between a comprehensive car insurance policy and an own damage car insurance policy. Go over the list of covers available under both plans. Then, make a list of your own requirements. Finally, equate your needs with the covers on offer and see which plan better meets your requirements. Get that type of motor insurance policy and keep your vehicle protected.

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

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