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Third-Party vs Comprehensive Car and Bike Insurance in India
Third-party insurance is compulsory for every vehicle used on a public road (section 146 of the Motor Vehicles Act). It pays for injury, death or property damage you cause to other people, but nothing for your own vehicle. A comprehensive (package) policy adds own-damage cover for your vehicle, and an own-damage-only policy covers just your vehicle and never replaces third-party cover. A new car must have 3 years of third-party cover and a new two-wheeler 5 years.
- Compulsory
- Third-party cover (section 146)
- New car
- 3-year third-party cover
- New two-wheeler
- 5-year third-party cover
- Premium set by
- Central Government with IRDAI
- On sale
- Buyer applies within 14 days
On this page
Which cover pays for what?
Find what happened, then the cover that pays. Always check the exact list of covered events and exclusions in your own policy wording.
| What happened | Which cover pays |
|---|---|
| You injure or kill someone else | Third-party cover (alone or inside a comprehensive policy), through the Claims Tribunal. Own-damage-only cover does not pay. |
| You damage someone else's vehicle or property | Third-party cover, alone or inside a comprehensive policy. |
| Your own vehicle is damaged in an accident | Comprehensive or own-damage-only, as listed in the policy. Third-party only pays nothing. |
| Your vehicle is stolen | Comprehensive or own-damage-only, as listed in the policy. Third-party only pays nothing. |
| You (the owner-driver) are killed or permanently disabled | Only the compulsory personal accident (CPA) cover, if you have it, bundled or bought separately. |
Claims for your own vehicle are explained in making a motor insurance claim, and theft in vehicle stolen.
What does third-party insurance cover, and what does it cost?
- Compulsory: no one may drive a motor vehicle in a public place, or let someone else drive it, without a policy that meets the Act (section 146). Vehicles carrying dangerous or hazardous goods also need a public liability policy. Government vehicles not used for any commercial purpose are exempt.
- What it covers: death or bodily injury to other people, damage to their property, and passengers of a transport vehicle (section 147).
- No upper limit for death or injury: the premium rules set the base premium for unlimited liability.
- Driving without it is an offence under section 196.
The premium for third-party cover is the same at every insurer: the Central Government fixes the base premium in consultation with IRDAI. The latest table we found on government sites is the Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules, 2022, in force from 1 June 2022 (amended in January 2024 only for three-wheeled passenger vehicles). Your insurer's quote shows the amount you actually pay.
Third-party base premium: private car
| Engine or motor | 1 year | New car, 3 years |
|---|---|---|
| Up to 1,000 cc | ₹2,094 | ₹6,521 |
| 1,000 to 1,500 cc | ₹3,416 | ₹10,640 |
| Above 1,500 cc | ₹7,897 | ₹24,596 |
| Electric, up to 30 kW | ₹1,780 | ₹5,543 |
| Electric, 30 to 65 kW | ₹2,904 | ₹9,044 |
| Electric, above 65 kW | ₹6,712 | ₹20,907 |
A private car registered as a vintage car pays 50% of the premium. Hybrid electric cars get a 7.5% discount.
Third-party base premium: two-wheeler
| Engine or motor | 1 year | New, 5 years |
|---|---|---|
| Up to 75 cc | ₹538 | ₹2,901 |
| 75 to 150 cc | ₹714 | ₹3,851 |
| 150 to 350 cc | ₹1,366 | ₹7,365 |
| Above 350 cc | ₹2,804 | ₹15,117 |
| Electric, up to 3 kW | ₹457 | ₹2,466 |
| Electric, 3 to 7 kW | ₹607 | ₹3,273 |
| Electric, 7 to 16 kW | ₹1,161 | ₹6,260 |
| Electric, above 16 kW | ₹2,383 | ₹12,849 |
Taxis, buses, goods vehicles and three-wheelers have their own rows in the same rules, often with an extra amount per passenger. Educational institution buses get a 15% discount.
What does a comprehensive policy add?
A comprehensive policy (IRDAI's circulars call it a package policy, and a third-party-only policy a liability only policy) has two parts:
- Third-party part: the compulsory cover above, at the government premium.
- Own-damage part: damage to your own vehicle and its theft, up to the vehicle's IDV and as listed in the policy. Its price is not in the government table, so quotes differ between insurers.
Before you buy or renew, check these in the policy schedule:
- The IDV: the most you get if the vehicle is stolen or totally damaged.
- The compulsory and any voluntary deductible you pay on each claim.
- Your NCB percentage, and whether it is shown correctly.
- Add-ons you chose, such as zero depreciation. Each insurer words these differently.
- Compulsory personal accident (CPA) cover for the owner-driver, or proof that you already have a separate accident cover.
- The start and end dates of the third-party and own-damage parts, which can differ.
- Who may drive: the policy's driver clause (see licence and claims).
CPA cover: since 1 January 2019, insurers may sell the owner-driver's compulsory personal accident cover as a separate one-year policy, covering death and permanent disability. If you already have a 24-hour personal accident cover of at least ₹15 lakh, you don't need a separate CPA policy.
When does an own-damage-only policy make sense?
An own-damage-only (stand-alone) policy covers just your own vehicle. It is useful when your third-party cover runs for longer than one year, as it does for a new vehicle bought with long-term third-party cover: each year you renew only the own-damage part.
What cover must a new vehicle have?
Following a Supreme Court order of 20 July 2018, IRDAI made long-term third-party cover compulsory for new vehicles sold from 1 September 2018. The premium is paid once, at purchase.
New private car
- 3 years of third-party cover, as a single premium (from ₹6,521 for up to 1,000 cc).
- Own-damage cover is your choice; check how many years it runs for in the schedule.
New two-wheeler
- 5 years of third-party cover, as a single premium (from ₹2,901 for up to 75 cc).
- Own-damage cover is your choice; check how many years it runs for in the schedule.
A long-term third-party policy can be cancelled only in a few cases: double insurance, total loss of the vehicle, or its sale or transfer. Registration itself is covered in registering a new vehicle.
How do renewal and transfer on sale work?
Renewing
Renew before the end date. Section 146 requires a policy in force whenever the vehicle is used in a public place, so a vehicle with a lapsed policy is uninsured on the road. In 2021 IRDAI advised insurers to let policies be issued into DigiLocker, where you can keep a copy with your RC and licence.
When the vehicle is sold
The certificate and policy are treated as transferred to the buyer automatically (section 157(1)). The buyer must still apply to the insurer within 14 days of the transfer, in the insurer's form, to have the records changed (section 157(2)).
Seller and buyerInsurer / RTOTime limit
- Seller and buyer sign the transfer forms and report the sale (see ownership transfer)
- By law the policy is treated as transferred to the buyer
- Buyer collects the policy copy with the RC and signed forms
- Applied to the insurer within 14 days of the transfer?No: apply at once and explain the delay
- The insurer changes its records to the buyer's name
If you are selling
- Hand over the policy with the RC, and keep copies of everything you signed.
- Ask your insurer what happens to the own-damage part and any refund, and tell it the date of sale.
- Finish the RC transfer: until it is done, you stay the registered owner. See vehicle ownership transfer.
If you are buying
- Check the policy end date before you pay; a lapsed policy means the vehicle is uninsured.
- Apply to the insurer within 14 days of the transfer. Doing it straight away is safest.
- Check that the vehicle details on the policy match the RC: registration, engine and chassis numbers.
The Jan Vishwas (Amendment of Provisions) Act, 2026 changes several Motor Vehicles Act time limits from dates the government notifies. Applying to the insurer at once keeps you safe whichever period applies.
How does the driver's licence affect a claim?
Whoever drives should hold a valid licence for that class of vehicle (see licence types). What happens if they don't depends on the kind of claim.
Third-party claim (someone else injured or their property damaged)
- The insurer must pay the tribunal's award to the victim, even if it could otherwise cancel the policy (section 150(1)).
- But it can defend the claim if the policy excludes driving by a person who is not duly licensed, or who is disqualified, or who was drunk (section 150(2)).
- If that defence succeeds, the victim's claim goes on against the owner and the driver, who may have to pay the compensation themselves.
Own-damage claim (your own vehicle)
- This follows your policy wording. Read the part of the schedule that says who may drive.
- If the driver did not meet it, the insurer can refuse the claim. If you think a refusal is wrong, complain to the insurer, then to Bima Bharosa or the Insurance Ombudsman.
What can go wrong, and how do you fix it?
| Your situation | What it usually means | What to do |
|---|---|---|
| Repair claim refused on a third-party policy | Third-party cover never pays for your own vehicle | Buy own-damage cover at the next renewal if you want it. |
| Stopped for "no insurance" with an own-damage-only policy | The third-party policy has lapsed | Buy third-party cover at once; own damage alone does not meet the law. |
| Third-party quote differs from the table | A discount, or a different vehicle category | Ask the insurer to show the category and the base premium. |
| Bought a used vehicle, policy still in the seller's name | The insurer was not told about the transfer | Apply to the insurer with the sale papers straight away. |
| New vehicle: two different end dates | Long-term third-party cover with a shorter own-damage part | Renew the own-damage part on its own date. |
| Third-party claim defended because the driver had no licence | The policy excludes unlicensed drivers | Get legal advice before the tribunal hearing. |
Frequently asked questions
Is third-party insurance enough?
It is enough for the law. It pays nothing for your own vehicle, its theft, or your own injuries.
Is comprehensive insurance compulsory?
No. Only the third-party part is compulsory. Own-damage cover is your choice.
Why is the third-party premium the same everywhere?
The Central Government fixes the base premium in consultation with IRDAI. The own-damage part and add-ons are not in that table, so their price differs between insurers.
How much is third-party insurance for a bike?
Under the 2022 rules, ₹714 a year for 75 to 150 cc, and ₹1,366 for 150 to 350 cc.
Does a new car really need 3 years of third-party cover?
Yes. New cars sold from 1 September 2018 need 3 years, and new two-wheelers 5 years, paid at purchase.
What is CPA cover?
Compulsory personal accident cover for the owner-driver: death and permanent disability. It can be bundled with the policy or bought separately for a year. A 24-hour personal accident cover of at least ₹15 lakh can replace it.
I bought a used car. Is it insured?
The policy passes to you on transfer, but apply to the insurer within 14 days to have it changed to your name.
Will the insurer pay if my friend without a licence was driving?
For injury to others, the insurer can defend the claim and the owner may have to pay. For your own vehicle, the claim can be refused under the policy.
Sources
- Motor Vehicles (Amendment) Act, 2019 – Gazette text (Transport Department, Chhattisgarh): new Chapter XI, sections 146, 147, 149, 150 and 157 (accessed 26 Oct 2026)
- MoRTH S.O. 859(E), 25 Feb 2022: Chapter XI in force from 1 April 2022 (accessed 26 Oct 2026)
- PIB – base premium for third-party insurance (26 May 2022) and Gazette: Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules, 2022 (accessed 26 Oct 2026)
- High Court of Tripura – Amendment Rules, 2024 (G.S.R. 32(E)) (accessed 26 Oct 2026)
- IRDAI – long-term third-party cover for new cars and two-wheelers (28 Aug 2018) and PIB – vehicle insurance, Lok Sabha reply (1 Jul 2019) (accessed 26 Oct 2026)
- IRDAI – compulsory personal accident cover for owner-drivers (11 Dec 2018) (accessed 26 Oct 2026)
- PIB – IRDAI and DigiLocker (Feb 2021) (accessed 26 Oct 2026)
- PIB – Jan Vishwas (Amendment of Provisions) Bill, 2026 (4 Apr 2026): 30-day licence period (accessed 26 Oct 2026)
- Bima Bharosa (IRDAI) and Council for Insurance Ombudsmen (accessed 26 Oct 2026)
Page history: 26 Oct 2026: first published.