In India, there are two types of vehicle insurance which is applicable to both the vehicle for personal use and commercial vehicle usage. The two policies are:

  1. Third-party insurance
  2. Comprehensive insurance

As per the motor vehicle Act 1988, the IRDAI ( Insurance Regulatory and Development Authority), calculates the third-party damage cost and based on it, it provides coverage.

Third-party insurance provides coverage to the damage incurred to a third party by the insured vehicle. An additional point to note about the third-party insurance coverage is that, in case of bodily injuries for injury to the person, they will get the benefits as the first party.

The comprehensive insurance policy is a wider term and entails a lot of details. As per the Motor Vehicle Act 1988, third-party vehicle insurance is a must in India. Failing to do so can put the vehicle owner under the legal gauge. Hence, it's always good to choose a third-party insurance policy as soon as one purchases the vehicle.

  1. Covers the liability for the third parties- This insurance policy provides you coverage against the damages caused to third-party. Hence, it becomes important that one must choose third-party insurance to save themselves from unnecessary wastage of money in case one bumps into an untoward situation.
  2. Drive hassle-free-If you have purchased a vehicle, you would not want to get into the legal hassles. Since the insurance policy for the vehicle owner is mandatory, it is always good to invest in a third-party insurance plan. Since it is cheaper than a comprehensive plan, you can easily invest in this plan.
  3. Save on traffic fines- The next benefit of investing in a third-party insurance policy is that it saves you from traffic fines. Since driving the vehicle without a license and insurance is considered a punishable offense in India, it is important to invest in this policy.