MotorBabuThird-party vs comprehensive insurance
What each type of car and bike insurance covers, what the law requires, and how to choose — in plain English.
Updated 16 Oct 2026
The difference at a glance
| Third-party | Comprehensive | |
|---|---|---|
| Required by law | Yes | No (includes third-party) |
| Injury or death of others | Covered, no upper limit | Covered |
| Damage to others' property | Covered, typically up to ₹7.5 lakh (cars) | Covered |
| Damage to your vehicle | Not covered | Covered (accident, fire, flood and more) |
| Theft of your vehicle | Not covered | Covered |
| No claim bonus | Not applicable | Up to 50% off the own-damage part |
| Premium | Fixed by the regulator, by engine size | Third-party premium + own-damage premium |
Third-party insurance
The legal minimum (Section 146 of the Motor Vehicles Act). It pays others when you're responsible for an accident — their injuries, and damage to their vehicle or property — and nothing towards your own vehicle. Its premium is set by the regulator according to engine size, so it costs the same with every insurer.
Driving without it can cost a ₹2,000 fine and/or up to three months in prison for a first offence (Section 196) — see what to do if your insurance has expired.
Comprehensive insurance
Third-party cover plus own-damage cover for your vehicle: accidents, fire, theft, floods and other natural disasters, riots. Claims are paid after the compulsory deductible and depreciation on parts, unless you buy add-ons such as zero depreciation.
Own-damage premiums vary by insurer, vehicle value (IDV) and add-ons — and get your no claim bonus discount, up to 50%.
New vehicles: multi-year third-party cover
Since September 2018, a new car comes with 3 years of third-party cover and a new two-wheeler with 5 years. The own-damage part can be bought yearly — from any insurer, as standalone own-damage cover. So check both dates on a new vehicle's policy: the own-damage cover may expire long before the third-party cover does.
Personal accident cover for the owner-driver
Compulsory: ₹15 lakh for the owner-driver, usually added to the motor policy. You can leave it out only if you already have a personal accident policy of at least ₹15 lakh covering death and permanent disability. One cover can serve all the vehicles you own.
Which should you choose?
- Comprehensive for a new or fairly new vehicle, one with a loan on it (lenders usually require it), or one you couldn't easily afford to repair or replace.
- Third-party only can make sense for an old vehicle with a low value, where own-damage premiums are high compared with what a claim would pay.
- Either way, renew on time — a lapse leaves you uninsured, and a gap of more than 90 days costs you your NCB.
This guide explains the general rules; your policy wording decides what's covered. Compare the inclusions, deductible and add-ons before you buy.
Keep track of both dates
MotorBabu reminds you 30 days before your policy expires and keeps the policy on your phone — free, for every vehicle you own.
Questions people ask
Is third-party insurance mandatory?
Yes. Under Section 146 of the Motor Vehicles Act every vehicle on a public road needs at least third-party cover. Comprehensive cover is optional.
What does third-party insurance cover?
Your legal liability to others: injury or death of another person (no upper limit) and damage to someone else's property (typically up to ₹7.5 lakh for cars — check your policy). It never pays for damage to your own vehicle or for theft.
What does comprehensive insurance cover?
Third-party cover plus own-damage cover: damage to your vehicle from an accident, fire, theft, natural disasters like floods, and riots — subject to the policy's deductible and depreciation.
What is standalone own-damage insurance?
Own-damage cover bought on its own, alongside a third-party policy you already have — for example on a new vehicle whose multi-year third-party cover is still running. It has been available since September 2019.
Do I need personal accident cover?
The owner-driver needs compulsory personal accident cover of ₹15 lakh, usually added to the motor policy. You can skip it only if you already have a personal accident policy of at least ₹15 lakh covering death and permanent disability. One cover can serve all your vehicles.
Does no claim bonus apply to third-party insurance?
No — NCB discounts only the own-damage premium, so it matters only with comprehensive or standalone own-damage cover. See yours with the NCB calculator.