Third-party is the legal minimum, but it won't pay a rupee for your own car. Here's what each covers and which you should pick.
Every car on an Indian road needs at least third-party insurance by law. But 'third-party' and 'comprehensive' cover very different things — and confusing the two can leave you paying lakhs out of pocket.
Third-party insurance
This covers your legal liability to others — if you injure someone or damage their vehicle or property, the insurer pays their claim. It's mandatory and cheap, but it pays nothing for damage to your own car, or for theft.
Comprehensive insurance
Comprehensive includes third-party liability plus 'own damage' — so it also pays for:
- Accidental damage to your own car.
- Theft of the vehicle.
- Fire, explosion and natural calamities like floods and storms.
- Damage from riots or vandalism.
You can also bolt on add-ons like zero-depreciation, engine protection, return-to-invoice and roadside assistance for near-total protection.
Which should you buy?
If your car is more than a few years old and low in value, third-party plus a personal-accident cover might be enough. But for any car you'd be upset to lose — especially newer or financed cars — comprehensive is strongly recommended. The extra premium is small compared to the cost of a major repair or a stolen car.
Buying comprehensive? Add zero-depreciation if your car is under 5 years old — it means no depreciation is deducted on replaced parts, so your claim pays out in full.
Don't lose your No-Claim Bonus
If you haven't claimed, you've earned a No-Claim Bonus (NCB) — up to a 50% discount on your own-damage premium. It stays with you even if you switch insurers, so always carry it forward at renewal.