Difference Between Third-Party Two-wheeler Insurance And Comprehensive Two Wheeler Insurance

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Most people look at a two-wheeler insurance policy since it has been made mandatory by the Government of India. Yes, a vehicle insurance policy is mandatory as per the Motor Vehicles Act, 1988, but it also has a long list of benefits to the vehicle owner. It offers financial security to the vehicle owner following an accident as it offers coverage to repair the damages of the two-wheeler and for the medical expenses of the parties involved. When availing a motor insurance policy, many two-wheeler vehicle owners opt for a third-party vehicle insurance policy as it is affordable as compared to a comprehensive insurance policy. While it is true that a third-party two-wheeler insurance policy is cheaper as compared to a comprehensive insurance policy, its coverage is limited as well. To help motor insurance policy applicants be clear of which type of policy to choose, we’ve listed out the main differences between a third-party two-wheeler insurance policy and a two-wheeler comprehensive insurance policy.

Third-party insurance vs comprehensive insurance policy

Listed below are some of the main differences between a third-party two-wheeler insurance policy and a comprehensive two-wheeler insurance policy:

• Premium cost

In comparison, a third-party two-wheeler insurance policy is way cheaper than a comprehensive insurance policy. This is because a third-party two-wheeler insurance policy is limited with regard to the coverage as compared to a comprehensive two-wheeler insurance policy.

• Coverage following an accident

A third-party insurance policy offers coverage only for damages caused to the third party in an accident. It offers coverage up to a certain point for the damages caused to the third-party vehicle or coverage for medical expenses if any. With a third-party insurance policy, no coverage is offered to the policyholder and he/she will have to repair their vehicle or cover medical costs from their own pocket. However, a comprehensive two-wheeler insurance policy offers coverage to both parties involved in the accident, including the policyholder or the first party.

• Own damage cover

In a third-party two-wheeler insurance policy, coverage is only applicable to the third party. In a comprehensive insurance policy, a policyholder can claim the own damage cover arising from a number of circumstances. From an accident, to a natural calamity (flood, earthquake, landslide, lightning, etc), to a riot, strike, or a terrorist activity. The two-wheeler comprehensive insurance policy offers coverage for both parties in the case of an accident, and in other circumstances, coverage is offered up to the insured declared value of the two-wheeler as well as coverage for medical expenses of the policyholder or the third party if he/she is injured or disabled following an eventuality.

• Add-on covers

A third-party two-wheeler insurance policy comes with the option of only a personal accident add-on cover. On the other hand, a comprehensive two-wheeler insurance policy comes with a long list of add-on covers, such as personal accident cover, zero depreciation cover, roadside assistance cover, engine protection cover, etc. Though the add-on covers are priced over and above the premium rate of the insurance policy, they enhance the coverage and the protection of the vehicle. By having them along with the main two-wheeler insurance policy, the out-of-pocket expenses following damage to the vehicle will be relatively low or nil.

While two-wheeler vehicle owners will be tempted to opt for the third-party insurance policy as they are rather cheap and affordable, as clearly highlighted above, the coverage as compared to a comprehensive insurance policy is limited as well. A comprehensive insurance policy will reduce your expenses following an accident or an eventuality. To make things simpler with regard to the cost of the premiums, two-wheeler vehicle owners can now opt for a multi-year insurance policy apart from the regular single-year policies. By doing so, they can pay for the premium at a discounted price and be insured for up to 3 years at a stretch.