Compare Third-Party vs Comprehensive vs Usage Based Plans

    When it comes to buying a car insurance policy, an Indian buyer has more than one alternative. There is a mandatory policy prescribed by the regulatory body, but apart from that, there are a couple of more alternatives too. Also, selecting a car insurance policy must be based on your requirements. This makes it even more necessary to know what the features of each type of policy are and how they benefit you.

    Whether you are buying a car insurance policy for the first time or due for your renewal, the selection of the right policy is essential and should be considered. This article helps you to compare how each available option differs from each other based on some common criteria –

    Third-Party Car Insurance

    Starting with third-party policies, it is the most basic car insurance coverage that you can buy. The regulator, Insurance Regulatory and Development Authority of India (IRDAI), has made it mandatory for all types of cars, whether used for private or commercial purposes to have a third party car insurance policy. A third-party plan protects your car against liabilities that can result due to an accident or injury to a third person. Since it is mandatory for all cars to have a third-party insurance plan, it is most affordable of all available options. The premiums for a third-party policy are decided based on the cubic capacity of your engine.

    Comprehensive Car Insurance

    If you find the coverage from a third-party policy limited in its scope, you can choose to opt for a comprehensive car insurance policy. This change or upgrade is even possible at the time of car insurance renewal. A comprehensive plan covers the damages to your car along with third-party liabilities. Further, this plan can be customised using add-on covers. Different add-ons have different purposes thereby being available for every kind of coverage sought. When it comes to pricing, a comprehensive policy is the most expensive of the lot due to the extensive coverage it offers and increases based on selected add-ons.

    Usage Based Car Insurance

    Usage based plans are a new type car insurance where the insurance coverage is for a specified duration. Alternatively, this type of insurance is also known as telematics insurance. Here, a specific device is installed in your car to monitor the driving based on kilometres and accordingly coverage is provided. A usage-based insurance is ideal for those who drive their cars not often yet want a complete peace of mind with an appropriate insurance cover. The cost of installing the telematics device is also included in the insurance cover. Unlike other types of insurance plans, the duration of a usage-based policy isn’t defined at the beginning. It depends on how much your drive your vehicle and is valid for a specified number of kilometres.

    Now that you know what the differences between the various insurance plans are, make sure to compare the benefits available under each alternative and accordingly select the one that fits you the best. Afterall, having a car insurance policy is that help you have a financial backup as well as mental security.  Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.