Updated on 28 Nov 2025
Did you know that while third-party car insurance is mandatory, it does not offer any protection for your vehicle? That means if your car gets stolen or damaged by fire, you are on your own- unless you have opted for a smarter upgrade: third-party fire and theft insurance.
This in-between policy offers more protection than standard third-party insurance without going full-fledged into a comprehensive car insurance plan. For budget-conscious car owners or those with older vehicles, this could be the ideal solution.
In this blog, we explore the essentials of third-party fire and theft insurance- what it covers, how it compares to other policies and when it is the right choice for you.
What is third-party theft and fire insurance policy?
A third-party fire and theft insurance policy safeguards you against potential damages caused to others and shields your vehicle in the unfortunate events of fire or theft.
Hence, it provides greater coverage than third-party insurance. It is also a more comprehensive choice as compared to just third-party car insurance.
How is third-party, fire and theft insurance different from third-party insurance?
Third-party insurance and third-party fire and theft insurance both cover damage caused to other people, vehicles or property. However, only the fire and theft variant includes protection against your vehicle being stolen or damaged due to fire. Neither option covers accidental damage to your own car. For that, a comprehensive car insurance policy is required.
While third-party fire and theft insurance comes at a higher premium than basic third-party cover, it offers added security by covering theft and fire-related losses.
How is third-party, fire and theft insurance different from comprehensive insurance?
Both are types of car insurance, but they offer different levels of protection. Here's a simple breakdown to help you understand the difference:
|
Feature
|
Third-Party, Fire and Theft
|
Comprehensive Insurance
|
|
Covers third-party injury or damage
|
Yes
|
Yes
|
|
Covers fire damage to your car
|
Yes
|
Yes
|
|
Covers theft of your car
|
Yes
|
Yes
|
|
Covers accidental damage to your car
|
No
|
Yes
|
|
Covers natural disasters (e.g. floods)
|
No
|
Yes
|
|
Covers vandalism or riots
|
No
|
Yes
|
|
Costs more than a basic third-party?
|
Yes (but cheaper than comprehensive)
|
Yes (more expensive)
|
Things to consider before purchasing third-party theft & fire policy
Before choosing between the two, consider factors like your car’s age and value as fire and theft insurance may be more cost-effective for older vehicles. If you live in an area prone to theft or fire, this policy offers valuable protection.
However, it doesn’t cover accident-related damage, so if your car is at higher risk of collisions, a comprehensive policy might be more suitable. Always weigh the premium against the potential benefits, based on your car’s value and exposure to risks.
Inclusions of third-party theft & fire insurance
When you opt for a third-party fire and theft insurance policy for car insurance, you’re not just protecting yourself from the potential harm your vehicle may cause to others, but also you protect your vehicle in case of theft or fire. The “third-party” aspect refers to the coverage provided for any damage or injuries caused to someone else or their property due to an accident involving your vehicle. This can include medical expenses, repair costs or legal fees that could arise from such incidents.
In addition to the third-party coverage, this policy also includes protection against specific risks, namely fire incidents and theft.
Exclusions of third-party theft and fire insurance
When considering third-party fire and theft insurance for car insurance, it is crucial to be aware of the exclusions that could result in your claim being denied by the insurance company.
Firstly, if your insured car suffers damage due to a fire caused by an electrical or mechanical breakdown, it may not get covered under the policy. Damages resulting from road accidents to the insured car, such as collisions with other vehicles or objects, are excluded from coverage. Another exclusion is if the driver involved in the accident does not possess a valid driving license at the time of the incident.
Conclusion
Third-party fire and theft insurance is a practical step up from basic third-party coverage, especially if you are looking for protection against the most common risks without paying the premium for a comprehensive car insurance plan.
It is an excellent middle ground for those who don’t want to be caught off guard by a stolen vehicle or a sudden fire. However, this type of policy doesn’t cover accidental damage. If you're often on the road or own a newer vehicle, a comprehensive plan may be the smarter choice.
Still unsure which type of coverage is right for you? Fill out the form on this page to get expert, personalised car insurance advice tailored to your needs.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.