Third-party liability insurance is a type of policy under which the insurance company offers cover for the insured against legal liabilities that arise due to the loss/damage caused by them to a third person’s body or their property.
On the other hand, a comprehensive car insurance policy offers complete protection against damages sustained by your car due to unforeseen accidents or as a result of other incidents such as natural/manmade risks.
Let us look at some terminologies to better understand the concept of Third-party liability insurance. Taking an example of an event in a car accident where parties involved are as follows:
First Party: Is the policyholder or the insured person
Second Party: Is the insurance company
Third-party: Is the person who claims for the damages caused by the first party from the second party.
In case the insured is held legally liable with the third party car insurance policy for injuries or damages caused to the third party, then the insured is indemnified with compensation. Any losses arising due to damages or injuries caused by the insured to a third party or third
party’s property, are covered under the 3rd party car insurance policy.
In the event of a car accident, the insured person holding the Third-party liability insurance policy must inform the insurer about the accident. If you turn out to be responsible for the accident (or the third party believes you to be responsible), a claim will certainly be filed against you, which your insurer will be expected to pay.
Thus, for the speedy resolution of the claim, the insurance company must be informed at the earliest. This is how a third-party motor insurance process works.
Damage to property/vehicle of third-party
Up to Rs 7.5 Lakh
Bodily damage/injury to third-party
Decided as per the Motor Accident Claim Tribunal(MACT)
There are many advantages to third-party insurance, let’s look at the ones that you will be eligible for in case you wish to buy Third-party liability insurance for your vehicle.
It is necessary to insure your car to legally drive on Indian roads, as per the Motor Vehicles Act, 1988. Getting this basic third-party insurance will save you from burning a hole in your pocket from the hefty traffic fines. Additionally, knowing that any unforeseen legal and financial liabilities arising due to an accident will be covered by your insurer helps you drive with peace of mind.
In case of events like an accident where you end up injuring someone physically or in severe cases you become the cause of the death/permanent disability of the third person. The third-party insurance holder will get coverage for all the losses up to unlimited liability.
Now you can buy your favorite car policy from the best car insurance companies from the comfort of home, with just a few clicks. This digital process says goodbye to the hassles of standing in queues, filling long forms, running from one counter to another to get the work done, and the huge struggle of travel, saving you loads of time and money.
In the event of an accident wherein the insured person causes damage to the third party car, the insurer will provide coverage of up to Rs 7.5 lakh for the third party.
Considering the heavy traffic on Indian roads, accidents are bound to happen, thus buying a Third-party liability insurance policy is a must. This will help you stay financially secure if an unplanned mishap comes your way, being prepared is always better than repenting later.
With a Third-party liability insurance policy, you will be covered against financial/legal liabilities in the following situations:
When you opt for a third-party-only car insurance policy, you should also be aware of all the exclusions. Let’s take a look at what all is not covered by the third party car insurance:
Let’s look at some of the disadvantages that you might face if you choose to buy Third-party liability insurance instead of a comprehensive car insurance policy:
There are many add-ons offered that can enhance the coverage of your plan, but you can only opt for them if you go ahead and buy a comprehensive car insurance policy. Being the most basic plan, Third-party liability insurance does not offer you this flexibility.
Future is not in our hands, natural calamities like floods, earthquakes, tsunami, etc., are some unpredictable and uncontrollable mishaps. If your car gets damaged due to a natural calamity, your Third-party liability insurance won’t be able to help you. Such coverage is only offered by a comprehensive car insurance policy that protects you from the damages sustained by your car both against natural or man-made disasters.
Third-party liability insurance does not provide coverage against the damages caused to your vehicle. To protect your car financially, you will have to buy a comprehensive car insurance policy.
Without a basic car insurance policy, your beloved vehicle will practically be useless and illegal to drive as the Motor Vehicles Act, 1988 makes it compulsory to carry car insurance. Having said that, not everyone can afford comprehensive car insurance policies for their vehicles and some don’t even find the need to acquire one. For this reason, third-party liability insurance suits a lot of individuals who want to drive their car peacefully as well as abide by the law.
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