Whenever we see an accident on the road, we thank God for keeping us safe and hope we would never face such situations. But the bitter truth is that everyone prays for that and accidents still happen. So lets face the truth and always be prepared to tackle such circumstances. Here preparation includes obeying all traffic rules, taking all safety measures, and most importantly having a motor insurance policy; which can help us to fulfill our legal liabilities toward third parties and their belongings or properties (in case your vehicle hits someone) and being financially ready to bear financial burden to restore everything. After reading this article, you can easily decide between compulsory third party insurance and comprehensive auto insurance.
Many people do not buy auto insurance because they think they don’t need it. They think that they drive very carefully and take all safety measures. If you’re one of that kind person then I just want to let you know that statistics show that in a large percentage of crashes victims do not have any fault. So here your excuse for not buying a compulsory third party insurance or comprehensive auto insurance vanishes.
Once you realize that you should have insurance for your vehicle then eventually another instinct comes into your mind that “which one to buy – compulsory third party insurance or comprehensive auto insurance?” In this post, we will discuss which motor insurance policy would be suitable for your vehicle. This post could help you decide between compulsory third party insurance and comprehensive auto insurance. Read on to know more.
Generally, you get two options in vehicle insurance; compulsory third party insurance and comprehensive auto insurance. As per Vehicle Motor Insurance Act, to run a vehicle on road it should have third party liability insurance to fulfill legal liabilities toward the third party; in case vehicle damages someone or his property. Therefore, third party insurance is imposed by law and you cannot ignore it. On the other hand, comprehensive auto insurance is tailored to protect insured vehicle and its owner or driver against financial losses and it also provides all the benefits that a third party insurance policy offers but you’re not obligated to buy it. Here is a brief explanation:
Third party insurance is imposed by law. On the other hand, comprehensive auto insurance is tailored to protect insured vehicle and its owner or driver against financial losses and it also provides all the benefits that a third party insurance policy offers but you’re not obligated to buy it.
Comprehensive Auto Insurance –
This policy is tailored to cover own damages (damage to vehicles and driver) along with all third party liabilities. comprehensive auto insurance or package policy is usually costlier than liability policy because it offers a bundle of extra benefits and protects your vehicle against almost all damages including theft. These policies also allow you add riders to them so you can insure an event of loss that is not covered. Riders are extra benefits that you can add to your policy after paying some extra money.
Those who own new or expensive vehicles, this policy is a must have thing. It is noticeable that these polices are subject to depreciation and exclusions so before opting a policy, you should read “what does you policy cover and doesn’t cover?” Insurers do not provide full compensation for the damage which means you would have to pay a percentage of amount from your own pocket so clear your doubts before buying a package policy.
If your vehicle is old and less expensive then comprehensive auto insurance would not be a better option for you. In that case, compulsory third party insurance could be a better choice but note that liability policies only cover third party liabilities, these do not cover you and your vehicle.
Compulsory Third Party Insurance–
These policies are designed, as per law, to cover third party liabilities if your vehicle causes damage to third party or his property. Such policies are much cheaper than comprehensive policies. Here keep in mind that you and your vehicle will not be covered.
Which one to buy?
As per above explanation, if you own a new or an expensive vehicle then you should opt comprehensive auto insurance. Otherwise, compulsory third party insurance would be suitable for your vehicle because these policies are subject to depreciation which means old vehicles get less compensation because of wear and tear. However, you can pick comprehensive auto insurance policy if you’re unable to bear your hospital charges; in case of physical injury caused by accident.