Car insurance policies offered by general insurance companies in India can be broadly classified into two types – liability only policy and comprehensive policy. While it is mandatory for you to own a liability policy, you have the freedom to decide if you need to own a comprehensive plan.
What is a liability policy?
This is also known as third party liability insurance. A liability policy would cover the liability towards a third party incurred on account of an accident. This would cover costs that may arise related to property damage, accidental death and injury to the third party in case the third party sues the insured for claim of such damages. In our country, it is mandatory for all vehicles plying on public roads to at least own a third party liability cover.
What is a comprehensive car insurance policy?
As the name suggests, a comprehensive insurance policy would also provide cover for costs incurred towards “own damage” apart from liability towards third party. The own damage cover would provide insurance against the repair costs to your car in the event of an accident, and also cost of repair of damage due to an unfortunate event like earthquake, flood or other unforeseen calamity.
The car insurance premium that you will have to pay would depend upon whether you choose to buy just a third party liability cover or a comprehensive cover.
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