Difference between Comprehensive Insurance & Third-Party Insurance

The quest to find the best car insurance coverage for you can be a bit lengthy and may require some thorough research but in the end, it is all worth it. Several factors plays very important role when you are choosing your car insurance and one of them includes choosing the type of insurance cover. Insurance companies in UAE offer two basic kinds of vehicle insurances – comprehensive car insurance and third-party insurance. Both these insurance types have their individual benefits but they also have several differences. As an aware customer, it is important that you have a basic understanding of both.

What is Comprehensive Car Insurance?

A comprehensive car insurance in UAE is meant to provide full coverage to both the insured and the third party in case of an accident. From damages incurred by the vehicles to medical bills of the third party and the insured, almost everything is covered by a comprehensive car insurance policy, hence the name. On top of accidental insurance cover, comprehensive car insurance also covers theft, complete loss of the vehicle, fire, natural disasters, vandalism, civil disturbances like riots, and some add-on services like engine cover, accessories cover, zero depreciation, etc.

Although car insurance and vehicle insurance is mandated by law in the UAE, it does not make comprehensive can insurance a compulsion, However, being the most thorough insurance available out there, comprehensive insurance is often recommended and preferred by most vehicle owners out there.

Comprehensive Car Insurance Let’s Understand with an Example

To understand the coverage umbrella of a comprehensive car insurance plan better, let us see an example. Say you have parked your car out in a street. A tornado happens to hit overnight and the raging rains happen to destroy the car in the process. Even when it is nobody’s fault that the car has been destroyed and requires extensive repairs to be of use again, the insurance company will cover the full cost of the damaged car, minus the deductible to be paid by the insured.

Another example can be an accident. You were driving and your car collided with another and damages are incurred by both the vehicles. Even if you happen to be at fault for the accident, your insurance company will cover all costs of damage repairs and medical bills for both you and the third party if they make a claim.

Benefits of Comprehensive Car Insurance

• Undoubtedly, comprehensive car insurance is the highest and the best level of insurance that you can get for your vehicles.
• It will cover not only your personal medical damages and damages incurred by the vehicle but also any third-party damage claims.
• Along with that, lawsuits and legal fees against you are also covered here.
• All-natural and man-made disasters are also fully covered under comprehensive insurance.
• The IDV or the Insured Declared Value of your car can be chosen freely by you in the case of comprehensive car insurance. It is the amount that the insurance company will pay in case of loss or complete damage to the car. Although, higher the IDV, higher the premium.

Third Party Car Insurance

Third-party car insurance will offer full coverage in the event of liability to a third party for the damages caused by your vehicle due to your fault. It is mandatory to have at least third-party car insurance in the UAE for all cars. Third-party liability insurance would cover any damages incurred by the vehicles of the third party as well as their own medical bills in case they have sustained injuries. One thing to note here is that your own car is not covered for damage under this type of insurance plan and neither are your own injuries.

Let’s Try to Understand What Third Party Insurance Cover in a Better Way

Let us see an example to get a better understanding of third-party coverage. You are driving on a highway and happen to meet an accident while overtaking. Your car as well as the car you collided with have suffered damages along. You and the other driver are also injured. You being at fault, your insurance company will cover for the damages caused to the third-party vehicle and injuries caused to the third-party itself. However, the damages caused to your vehicle will not be covered and neither will your own medical bill.

Another example here can be natural disasters, theft, and fire. If your car happens to be damaged during a natural disaster or a man-made disaster like riots, terrorism attacks, etc. or gets stolen, the insurance company will not cover for the loss of your car or the damages.

Benefits of Third-Party Insurance

• Security from Legal Liabilities is the biggest pro of third-party car insurance. Even when at fault, it is not necessary that the insured person causes the accident knowingly. Having to pay hefty legal claims from third-party can be a huge burden. This type of insurance cover will save you that trouble.
• Third-party car insurance plans are cost-effective protection against damages. Since the cover umbrella is smaller, the premiums and deductibles are also lesser.
• Third-party insurance is a great fall-back option when your car is not brand new anymore and you can afford to pay the self-repair charges yourself.

Read More - How to Convert Third-Party Insurance to Comprehensive?

A Comparative Overview: Comprehensive Vs Third-Party Car Insurance in UAE

When selecting car insurance in Dubai, UAE, it’s important to grasp the differences between third-party and comprehensive coverage. Here is a comparative overview of third-party and comprehensive motor insurance in Dubai, UAE.

*For reference only — actual prices may vary as per your driving experience, car’s age, condition, and more

Third-Party Vs Comprehensive Car Insurance: Which Plan is Suitable for Whom?

If you are a new car owner, own a luxury vehicle or vintage vehicle, or financed vehicle, you can go for comprehensive motor insurance. This is because it covers replacement costs and full repair costs. If you’re an old car owner (car older than 5 years), it’s better to get third-party car insurance as the premium is lower.

If you are a frequent, long distance driver, you should opt for comprehensive motor coverage with add-ons like roadside assistance, GCC cover, and more.

Also Know - Why Is Comprehensive Car Insurance More Expensive Than Third-Party Insurance?

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