Third Party Insurance vs Comprehensive Insurance
Do you know it is a good idea to fully understand the types of car insurance plans available when trying to decide on car insurance?
To know the best insurance policy plans for your car, it is necessary to have a full understanding of the features and conditions of these different types of insurance coverage provided by most insurance companies and what policy plan suits you better.
In this post we will be giving significant information about Third Party Insurance and Comprehensive Auto Insurance; their similarities and differences.
What is Third Party Insurance?
Let’s say you are reversing out of a parking lot and there are several of your neighbours’ cars parked around you. You miscalculated the distance between your car and the car directly behind you and back into it. Your car gets a dent in the bumper and broken headlights. Your neighbour’s car is also damaged; its rear has been dented.
If you have third party insurance the insurance company will cover the cost of the damages on your neighbour’s car.
This car insurance coverage is the minimum automobile insurance protection that a car owner is required to have in Nigeria according to the Motor Vehicles Act of 1950.
Third Party Insurance plan does not cover damages to your car nor the theft of your car.
Benefits of Third Party Insurance
- It covers third party liabilities.
- Third party insurance is less costly compared to comprehensive auto insurance.
- It can protect you from the law since it is backed legally.
What Is Comprehensive Car Insurance?
The rain finally stops after a heavy downpour, you are about to get into your car for a quick run to the supermarket. You get outside and get shocked to find out that your vehicle has been damaged by a fallen tree.
If your car is covered by comprehensive auto insurance, the insurance company covers your car’s current market value. This Insurance plan covers third party liability as well as any damage to your car.
Comprehensive insurance can also cover legal fees in case you are sued due to a road accident. Damage by vandalism, theft, car stereo theft, fire, windscreen replacement or repair, are also covered.
Benefits of Comprehensive Insurance
- Comprehensive insurance lets you claim for damages that are caused by a natural disaster.
- In case of theft, comprehensive insurance pays for the replacement of your car.
- If the fault can’t be proven after your car has been damaged, comprehensive will cover the damage.
- Although it is expensive, comprehensive insurance is highly cost-effective.
Difference between Third Party Insurance and Comprehensive Auto Insurance
The major difference between these two insurance policy plans is the kind of coverage they offer. Third party insurance as the name clearly states covers third party liabilities only, while comprehensive insurance does not only cover third party liabilities but also damages done to your car.
| Third Party Insurance | Comprehensive Insurance | |
| Limitations | This insurance policy plan provides cover for third party liability only. This insurance policy plan does not provide cover repairs on your car. This makes this policy plan less cost-effective. | Damage to your car as a result of ageing is not covered by this insurance policy plan. Losses and damages caused by war and nuclear attacks are not covered by this insurance policy plan. |
| Exclusions | This insurance policy plan does not provide cover for accidents due to drunk driving. This insurance policy plan does not provide cover if you drive without a licence. | This insurance policy plan does not provide cover for accidents caused by drunk driving. This insurance policy plan does not provide cover if you drove without a licence. This insurance policy plan does not provide coverage against consequential damages after the assessment of initial damage. This insurance policy plan does not cover damages and loss that occurs due negligence. |
Generally, Third party insurance policy is restrictive since it covers damage to other cars and their passengers. Comprehensive auto insurance policy on the other hand covers a wide range of car damages, injuries from accidents, third party liability, loss to your passengers and damage to other properties.
If you want to purchase insurance for your car, make sure you choose the best plan that will provide the right level of coverage that is best for your car and also cost-effective. Hence, if you can’t do without using your car and you ever get involved in a car accident where you are not at fault, you will be pleased you got the extra protection!