Difference Between Third-party and Own Damage Car Insurance

Published On Nov 23, 2021 11:00 AM By InsuranceDekho

There are many different types of car insurance policies that are available. Therefore, it is important to deliberate and take the perfect one suited to your needs.

Car insurance is a mandatory purchase if you want to keep your car safe, sound and well maintained for a long time to come. Moreover, there are different types of car insurance policies available. While a comprehensive car insurance policy basically covers all aspects, there are two other types of car insurance available: third-party car insurance and own-damage car insurance. Find out the difference between them in this article. 

What Is A Third-Party Car Insurance Policy?

A third-party car insurance plan covers any incident involving your car and a third party, which is an external factor. It covers the financial costs that might have been incurred by the third party due to your car. This can include loss or damage to property as well as human injuries or even loss of life. It is one of the most basic car insurance policies available and is very beneficial because it covers the legal intricacies that might come with your car injuring someone else or their property. This is a necessary car insurance policy that must be purchased by all vehicle owners.

What Is An Own Damage Car Insurance Policy?

Under an own-damage car insurance policy, your vehicle and its damages will be covered. It does not involve or cover any third party. The incidents that are covered under this kind of policy usually include natural as well as man-made disasters like theft and burglary. It also covers damages caused due to the inner mechanisms of the car. This policy is advisable for all car owners who might live in areas that tend to flood or have water-logging or any other such consistent natural disaster. It covers a wide range of scenarios and if in case you make no claims against the policy, you can even avail of No-Claim Bonus on your premium amount.

Difference Between Third-Party and Own-Damage Car Insurance

Having a better understanding of both the insurance policies with respect to each other brings more clarity regarding their characteristics. Here are the differences between a third-party insurance policy and an own-damage car insurance policy.

Third-Party Insurance 

Own-Damage Insurance

This is a mandatory policy for all vehicles and is regulated by the Insurance Regulatory and Development Authority of India (IRDAI), making its price affordable.

The premium price for this type of insurance plan depends on the insurance provider and differs across different companies. 

Under a third-party insurance policy, the policyholder cannot purchase any add-ons.

Add-ons are available with own-damage car insurance policies but they levy an additional premium.

Although it needs to be bought by everyone, having only this policy can often prove to be insufficient because of its limited scope. Some charges will still have to be paid by the policyholder. 

This adds an extra layer of protection other than the third-party insurance which you necessarily have to buy. Since it is customizable with add-ons, you can enhance the protection as required. 


Having third-party insurance is compulsory if you want to legally ride your car in India. It is basic protection and is suitable for those who do not drive around much. Its biggest benefit lies in the fact that it can compensate for human injuries and lives, without any legal trouble. However, for more enhanced and comprehensive protection, you will have to purchase a better plan with more features, like your own-damage car insurance.

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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