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Which is the Best Plan for Third Party Car Insurance?

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In India, third party car insurance is mandatory by law as per The Indian Motor Vehicles Act, 1988. Whether you are the owner-driver of a four-wheeler, two-wheeler, or commercial vehicle, you need to buy a third-party liability insurance coverage as soon as you buy your vehicle. It is equally important to keep it renewed at all times so that you do not lose out on the accumulated No Claim Bonus and other benefits of the policy purchased by you.

How Do You Find the Best Plan for Third Party Car Insurance?

The challenge lies in choosing the best third party car insurance plan from the plethora of car insurance products available in the market space. Shortlist the plans that provide higher coverage and better benefits. It is important to include only the essential add-ons so that the sum assured aligns with your premium paying capacity. The best plan is usually the one that takes care of all third party liabilities along with providing personal accident cover and cover for damage or loss to your vehicle.

How is it Different from Other Insurance?

Third-party insurance for motor vehicles, or third-party liability coverage as it is more popularly called, is sometimes referred to as ‘act only’ cover. Unlike other types of insurance plans, this type of coverage is a statutory requirement for driving on Indian roads. While other insurance plans provide direct benefits to the policyholder or their nominees, ‘third-party’ cover provides benefits to any individual other than the two contracting parties – the insurance company and the policyholder.

No benefits are provided to the person purchasing the third party car insurance plan. The benefit provided to the insured person comes in the form of coverage for taking care of the legal liabilities for death/disability to any third person, or for taking care of the damages or losses inflicted to third party property.

Difference between Third Party Car Insurance and Comprehensive Cover

As you scour through the different types of car insurance plans available online on aggregator sites like, you will get to know about third party car insurance and comprehensive car insurance plans. These two types of plan are the most popular of the lot and are instrumental in safeguarding third party person and property, yourself, and the vehicle in your possession. Take a look at some of the prominent differences between the two.

1. Range of Protection

Comprehensive car insurance plans offer multiple protection covers for your vehicle and yourself along with providing protection to claims related to third-party injury, death, or damages. There is no upper limit to the coverage amount for policyholders in case of comprehensive car insurance plans. Additionally, there are several add-ons that can be purchased to increase the coverage amount and scope beyond third-party liability and personal accident cover for self and co-passengers, etc.

Zero depreciation cover, No Claim Bonus cover, cover for engine damages, coverage for accessories, etc. are some of the many add-on benefits that can be purchased to make these plans all the more worthwhile.

On the other hand, third party car insurance coverage is mandatory by law and is also defined to a large extent by the Motor Vehicles Act, 1988. There is no outside limit for the coverage provided for third-party death, disability, or injuries caused as a result of an accident in which you are at fault. However, the maximum permissible cover for third party property damage is restricted to INR 7.5 lacs only.

2. Value of Vehicle

In case you have an old car, a second hand one, or a new vehicle that is of low value, then it is advisable to opt for standalone third-party car insurance only. This is because the cost of repairs for the damages caused as a result of any accident will not be very prohibitive and can be managed easily and cost-efficiently. It is surely cheaper to take care of the repair expenses from your pocket rather than pay the high premiums linked with comprehensive car insurance. But the same is not the case if your vehicle is expensive or branded – herein, comprehensive car insurance serves to be a better option.

3. Expense

Comprehensive cover for car insurance is costlier than third-party cover because it offers coverage for different types of damages, injury, and losses.

Way Forward

Whether you are keen to purchase standalone third-party car insurance or comprehensive car insurance with extra riders, serves to be your friend in need. Do compare different car insurance plans available online before freezing your buy on one.