Vehicle insurance has been mandated by law in India, therefore, many people buy vehicle insurance to fulfil the legal liability. If you wish to buy the vehicle insurance, it is very important for you to understand the insurance policy and the benefits thereon.
There are basically 2 types of insurance policies which are offered by insurance companies in India i.e. Third Party Insurance and Comprehensive Insurance.
A comprehensive policy provides overall cover against damages to both parties, i.e. policy owner and third-party, involved in an accident while third party insurance policy protects you only in case of losses/damages to third party.It is very necessary to understand the following terms with regard to Two Wheeler Insurance:
| Basis | Third Party Insurance | Comprehensive Insurance |
|---|---|---|
| Definition | Third Party Insurance is the basic level of insurance mandated by Indian law to drive a vehicle on road. It covers damage to others from an accident which took place due to your fault | Comprehensive Insurance covers you for accidental damage caused by you or others |
| Liability Coverage | Legal liability arising from injuries or death to a third-party and third-party vehicle damage | Covers the third party liability as well as your injuries and vehicle damage or theft |
| Necessity | Mandatory by Law | Not mandatory |
| Premium Calculation | Decided every year by the Insurance Regulatory and Development Authority of India (IRDAI) | Depends upon factors such as the make and model of the bike, engine capacity, etc. |
| Premium | Relatively low | Relatively high |
| Add-on Cover | You can only buy a personal accident cover as an add-on | You can buy various add-ons such a Zero-Depreciation Cover, Return to Invoice Cover, Engine and gearbox cover, Key replacement cover, etc. |