Third Party Insurance vs Comprehensive Insurance
Third party insurance and comprehensive insurance are two options available for owners who want to insure their automobiles. Owning a new car is a delightful experience and a car is a thing of pride for the owners. Getting it insured is a necessity, as you don’t want to be left in the lurch when you face a mishap, do you? There are people who consider their car as an asset and hence go for a comprehensive insurance, while others take it as a utility to cover distances and are satisfied with a third party insurance only. Whatever the type of insurance you opt for, it is a fact that getting insurance is a must for your car. Let us see what the differences between a third party insurance and a comprehensive insurance are.
In insurance terminology, first party is the individual or business that is getting insurance policy and the insurance company is called the second party. Third party is the person or company that claims damages after suffering a loss through your car. Third party coverage is most commonly used in terms of auto insurance only. Comprehensive insurance, on the other hand, as the name suggests, is full coverage that includes third party coverage.
Third party coverage refers to damage or loss of property to third party (see definition above). In this type of coverage, the insured is not covered at all, and the insurance company will only pay for the claims made by third party for loss of life or property.
Comprehensive policy on the other hand is all inclusive and covers third party claims. The person who takes comprehensive insurance can claim for any loss or damage to his vehicle, but not those occurring from collision. Claims are limited to theft, vandalism, fire, hitting an animal, and damages resulting from inclement weather such as floods or lightning. You can call it as other than collision coverage, however hitting an animal is covered under comprehensive coverage.
Conclusion
If you are not too concerned about the safety of your own car and bothered with claims made by third party, you can opt for third party insurance.