A Complete Guide to Third Party Car Insurance

What is third-party car insurance?

Third-party car insurance is a type of motor insurance cover that protects you from third-party liabilities. A third-party insurance policy provides coverage to the vehicle owner for damage to any person other than the policyholder and the insurance company. The damage includes damage to the third party’s vehicle, property, physical injury, disability, or death.

Is it mandatory to take third-party insurance?

In India, we hear a lot of cases of road accidents reported in the newspapers. Due to this reason, the Motor Vehicles Act of India, 1988, mandates all vehicle owners to take third-party liability insurance.

What is covered in third-party insurance?

When an insured car owner causes an accident, it is his responsibility to pay for the damages to the third person. Third-party car insurance provides coverage for third-party liability. The third-party liabilities arising out of:

1. Property Damage: If the insured car owner accidentally rams a vehicle into someone’s property, then the insurance company will pay for the damage to that person up to Rs. 7.5 lakh.
2. Bodily Injuries: Accidental bodily injuries or disability to the third person will be compensated by the insurance company. The amount will be decided by the Motor Vehicle Tribunal after assessment of the loss
3. Accidental Death: If a person dies due to a road accident caused by the insured car, then the car owner will be responsible for such death and the insurance company will pay the claim amount to the family of the deceased.

What is not covered in third-party insurance?

Common exclusions of the third-party car insurance are given below:

1. Drunk Driving: When the car owner is under the influence of alcohol or drugs.
2. Own Damage: Only damages to the third party are covered and damages to the policyholder are not covered in this cover.
3. Invalid Driving License: If the driver of the insured vehicle has an invalid driving license or does not have a license, then the company is not liable to make claims.
4. Unauthorized Usage: Illegal activities, racing, or any other unauthorized usage of the vehicle will not be covered by third-party insurance.
5. Deliberate Attempt: When the driver of an insured vehicle deliberately attempts to harm a third person, then the company will not compensate.

These are some of the general exclusions of third-party cover. You must read your policy document to know all the exclusions of that insurance company’s policy.

Benefits of third-party car insurance

1. Financial assistance: The cover protects you financially as it covers the damages to the third party (bodily injury, disability, or death) as well as damages to the property of the third party caused by the use of the insured’s vehicle.
2. Easily available: Since it is mandatory to buy third-party insurance, it is easily available and easy to buy and renew.
3. Fulfills the legal mandates: By buying a third-party insurance cover, you will be complying with the requirements of the Motor Vehicles Act.
4. Cost-effective: Premium is highly affordable.
5. No more stress: It gives you a stress-free driving experience as it indemnifies you for the damages to the third party caused by or arising out of the use of the insured’s vehicle.

How to claim third-party car insurance?

When you have accidentally damaged someone else’s vehicle or property or caused someone to die or suffered a bodily injury, the matter can be settled by following the third-party claim process given below:

Lodge an FIR

The legal heir of the deceased or the victim himself needs to lodge an FIR with the police, furnishing the required details. They will obtain a charge sheet from the police.

They must remember to have the charge sheet and original records of the expenses.

Approach the Motor Accident Claim Tribunal (MACT)

All the third-party claims are settled in a Motor Accident Claim Tribunal. The third-party must register the case with MACT, who will then finalize the claim amount. If there is a claim, then:

Notify the insurance company about the accident

The insured need to notify the insurance company, without notifying the insurer, the claim cannot be indemnified. The insurer may fully be compensated for the amount decided in the court verdict subject to a maximum of Rs. 7.5 lakh in case of property damage.

FAQs

Why is it called 3rd party insurance?

The beneficiary of the policy is someone who is not involved in the insurance contract (the insurance company and the vehicle owner). They can be anyone other than the two parties in the contract. The benefits of the policy are given to the third party and not to the insured.

Does 3rd party insurance cover my car?

The owner of any vehicle, who has registered it with the RTA in India can buy third-party insurance.

Go ahead and buy third-party insurance.

If you face any insurance-related problems, you can contact Insurance Samadhan. We have helped 14,500+ people in resolving complaints related to insurance. Contact us to get samadhan for your insurance-related issues. We are always available to help you out.

Click on the below links to read some cases resolved by Insurance Samadhan:

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