What is Comprehensive Insurance?

"Speed thrills but kills" or "Do not drink and drive" signboards hung up on the highways are meant to remind drivers on the roads to adhere to rules in order to stay safe and avoid accidents. Other than that we have the traffic police across the country in charge of maintaining road safety. However, we can only take preventative steps to avoid accidents or to protect their vehicles against damage due to several other reasons.

Thus, in order to protect vehicle owners in case of any accident, loss, theft or damage to the vehicles, auto insurance coverage is available to them. An individual can opt for the type of insurance policy that suits their requirements. The two broad types of auto insurance covers available are third-party car insurance and comprehensive insurance. In India, third-party Car Insurance has been made mandatory for all vehicles plying on the roads. However, this does not cover damages to the policyholders or their own vehicle.

This is where a Comprehensive Insurance Policy comes into the picture.

What is Comprehensive Insurance?

A Comprehensive Car Insurance, also referred to as a package policy, is a wider policy that involves insurance cover for own damage as well as third-party liability. It also protects the insured against legal and financial liabilities to a third-party in the case of any accident, along with a personal cover for the car owner. You and your vehicle are protected in case of any loss or damage due to accident, fire, theft or natural calamity.

Such a policy is preferred by many car owners these days as it offers en-to-end coverage, and can also be customised with several add-on features. But the wider coverage makes is a more expensive policy option than the mandatory third-party insurance policy. For most vehicles purchased via a financier or a loan, a Comprehensive Insurance policy is required in order to insulate the finance company against loss or damage.

Difference between Comprehensive and Third-Party Insurance

Unlike in a third-party insurance policy where only damages caused by the insured car to another individual or their property is covered, a comprehensive policy offers personal accident cover for the vehicle owner/policy holder and his or her vehicle is also protected against damages due to theft, vandalism, natural calamities, among other things.

If a car owner were to be in an accident and he or she has only a third-party mandatory insurance policy, then neither is the policyholder covered nor is his or her vehicle. But, if the said individual held a comprehensive auto insurance, then the policyholder, the vehicle owned by him/her and the third-party (or their property) involved in the accident is covered under the insurance.

What does Own Damage (OD) part of a Comprehensive Policy cover?

According to the Insurance Regulatory and Development Authority of India (IRDAI), damages to a vehicle due to any of the following reasons are usually covered under OD section of a Comprehensive Insurance Policy:

  • Fire, Explosion, Self- Ignition, Lightning

  • Burglary/Housebreaking / Theft

  • Riot & Strike

  • Earthquake

  • Flood, Storm, Cyclone, Hurricane, tempest, inundation, hailstorm, frost

  • Accidental external means

  • Malicious Act

  • Terrorism acts

  • While in Transit by Rail/ Road, Inland waterways, Lift, Elevator or Air

  • Land slide / Rock slide

However, the IRDAI also lists certain contingencies that are excluded under any auto insurance policy cover. These are:

  • Not having  a valid Driving License

  • Under Influence of intoxicating liquor/ drugs

  • Accident taking place beyond geographical limits

  • While Vehicle is used for unlawful purposes

  • Electrical/Mechanical Breakdowns.

​​​​​​​Looking to apply for a Comprehensive Car Insurance? Apply here now!

Looking to renew your Car Insurance? Here’s how you can go about it!

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.