Third Party Insurance: Your Ultimate Stress Buster

*Please note that the quotes shown will be from our partners

Our news channels are flooded with news related to various road accidents, one vehicle hitting another, road injury, or some extreme cases lead to a spot death or emergency hospitalisation. While driving your car on the road, there is always a possibility of an accident, injury or damages to a third party’s property in a road accident. The guilty car owner may right away become liable to compensate to the afflicted party. Here comes the third-party insurance in the picture, which saves you from being bankrupt due to such an emergency. As per the Indian Motor Vehicles Act, Third-party Auto Insurance is a statutory need, which gives financial protection against third-party liabilities. As the term denotes, the policy doesn’t benefit the policyholder but an afflicted party. Here is why you need a third-party insurance plan before you hit the roads.

The relationship falls under:

 Third Party Car Insurance

 

Benefits of Buying Third-party Liability Insurance

Financial Assistance and Legel Liability:

In case you cause a damage to a third party which leads to a legal liability, the third party insurance is your only rescuer that bears the cost on your behalf. However, in this plan, the direct beneficiary is neither the policyholder nor the insurer but a third party.

Saves You from Being Bankrupt:

Those sudden expenses can bring a big hole in your pocket. With a third party insurance policy, you can keep the stress at a bay, as it takes care of all expenses claimed by a third party and saves you from being insolvent.

Easy Accessibility and Easy to Procure:

One can easily avail a third-party insurance policy for his/her vehicle. The application and renewal procedure is easy. With a plethora of insurers introducing their plans online, it is easier to buy a plan online as well. It saves both your time and money at the same time. People these days prefer online purchasing rather than visiting the insurers’ offices or buying through their agents. However, taking advice from an expert is a must!

Can Make a Claim if Policyholder is a Third Party

It is also beneficial if you are a third party hit by somebody else’s car. You can charge the person for the damages and subsequent expense incurred. These all include medical costs incurred due to hospitalisation, physical deformity, or compensation in the event of death. Medical costs can also be claimed for the treatment of an injury that causes the death.

Low Premium Rate:

The premium payable for a third-party insurance plan as fixed by IRDA is considerably lesser than that of a comprehensive plan. IRDAI has fixed the rate for third party insurance may differ insurer to insurer.

You may like to Read: 5 Things to Know about Third-party Insurance

Difference of coverage between a Third-party and Comprehensive Plan:

Risk Covered

Third Party Policy

Third Party Fire & Theft Policy

Comprehensive Policy

Accidental Injury, death caused to the third party

Yes

Yes

Yes

Property loss or damage to the third party

Yes

Yes

Yes

Loss due to fire or theft

No

Yes

Yes

Own damage to the vehicle

No

No

Yes

Injury & death to you or another passenger

No

No

No

Premium charged

Low

Moderate

High

 

Whether tou require a comprehensive plan or not is dependent on a few factors. It is very much important to understand your requirement before buying a policy.

If you car is too old and you don’t think that it deserves a comprehensive plan, then it’s better to opt for a third party insurance plan. Paying third-party liability insurance premium is cheaper when compared to the premium that you pay for a comprehensive motor insurance plan. But, if you have a luxury or brand new car, then simply opting for a comprehensive plan with third party insurance is a wise decision.

This coverage has become priority these days, after the govt. considered it as mandatory for every vehicle plying on the roads. But it doesn’t provide any benefit or coverage against damages to your own vehicle, until and unless you are not the third party or lodge a claim against the other owner’s fault.

Caution - A Case Study

Before purchasing a motor insurance, you should perform a thorough research without fail. It is mandatory to know how the policy works, terms and conditions, or what all conditions the policy coveres. Also, ensure that the insurer is registered with the IRDA, before buying a plan. Let’s dig into the idea by taking an example of an Indian, Mr. Mahesh Mishra.

While driving his Mahindra Van on a winter morning, Mr. Mishra hit an auto, which damaged the driver who was taken to a hospital. Auto driver’s family members claimed a compensation against the damages.

When the case went to the court and it was found that Mr. Mishra was driving his car for a commercial purpose, while holding a LMV (Light Motor Vehicle) licence. In this case, the insurer rejected the claim and refused to compensate the money to the third party (i.e. the victim’s family). Later, Mr. Mishra had to pay the whole amount on his own, as the court declared the vehicle owner as liable to pay the amount to the afflicted family.

From this example, we can figure out that for a small negligence, you may end up welcoming a huge financial loss. The above-mentioned situation arises when the insured is left without third party insurance coverage due to his/her carelessness.

Third-party Liability Insurance: The Claim Process

In case of third-party insurance, while filling a claim, you need to follow the below steps:

  • Inform the insurer about the damage with no delay by calling on the toll-free number
  • Register your claim online, as it is the fastest way to intimate your insurer about the incident
  • If needed, towing facility would be provided

You need the following documents to file a claim:

  • A filled claim form and signed by the insured
  • A copy of valid Driving License
  • A copy of police FIR
  • RC copy
  • A photocopy of policy document

Don’t consider Third Party Insurance just because it is mandatory by Indian Motor Law. Evaluate the benefits of it. Once you realise how it protects you in odd circumstances and analyse your requirement, you don’t need a push to have Third Party Insurance for your vehicle. The vibes will come from within!

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