All you need to Know about Third Party Commercial Auto Insurance

A third-party commercial vehicle insurance policy covers risks arising due to third party liabilities such as third-party vehicle damage, third-party bodily injury. It offers the desired protection in the event of any legal liability related to an accidental injury, death, or third-party property damage by the insured vehicle.

It is a statutory requirement for all the vehicle owners in India to have a third-party vehicle liability cover as per the Motor Vehicles Act. This was created keeping in view the safety of the drivers, passengers, and pediatricians while maintaining the decorum on roads. It is one of the most basic forms of motor insurance policies that one needs to buy in India.

A beneficiary is actually a third-party person who has been injured or a third-party property that has been damaged by the insured. A third-party that is involved in an accident or has suffered bodily injuries or damage to property from a vehicle, he/she can file a third-party claim for compensation as per the law.

Who can Buy Third-Party Auto Insurance for Commercial Vehicles?

Anyone who holds a valid driving license can buy third party cover for their bus, trucks, commercial trailer, or any other heavy duty vehicle being used for commercial purposes. The vehicle has to be registered with the RTA i.e. Regional Transport Authority of that area. Various commercial vehicle insurance companies in India provide third party liability insurance cover.

Why buy Third Party Insurance for Passenger or Goods Carrying Vehicle?

Third party insurance offers protection when there is a third-party legal liability arising due to the insured’s fault.

Any loss or damage caused to another person or property caused by the policy holder is covered under third party commercial vehicle insurance.

It also covers any legal troubles arising in the case of third-party accidental death.

How Does Third-Party Commercial Vehicle Insurance Work?

Here’s how it works under the following circumstances-

  • It covers damage caused to a third-party property by the insured vehicle
  • It covers death or accidental injury caused to a third party
  • If the insured is held liable by a third-party for the bodily injuries, death or property damage, then the car insurance provider will compensate on behalf of the policyholder.

Here’s a quick rundown of the some of the terms that are used for the parties that are involved in a motor accident-

  • The policy holder or the insured person is addressed as the first-party
  • The insurance company is addressed as the second-party
  • The person who files a claim against the loss or damages caused by the first party is called as the third-party

How is a Third-Party Insurance Beneficial for Commercial Vehicles?

Elucidated below are some of the benefits of third-party insurance for vehicles that are being used for commercial purposes:

  1. Cost Effective- Third-party liability insurance is already included in a comprehensive auto insurance policy, and in a standalone policy it proves to be quite in comparison to its intended use.
  2. Peace of Mind- Draining off your savings to an affected third-party can be financially and emotionally stressful. Whereas, a dedicated third party vehicle policy can save you from the financial and emotional stress.
  3. Hassle-free Online Renewal Process- It is quite convenient and time saving to renew or buy third party commercial auto insurance online. It is simple and hassle-free as you can do with your convenience.
  4. Round-the-clock assistance - One major benefit of applying for third party insurance online is that it can be purchased anytime, anywhere from the online portal, unlike the traditional offline methods.

What are in the Inclusions of a Third Party Commercial Vehicle Insurance Policy?

You can file a claim for any loss or damage arising under the following circumstances:

  • Accidental Death and Injury – There is no limit on coverage in case of death or bodily injuries. In the event of accidental death, the insurer recompenses the amount decided by the Motor Tribunal. It is decided on the basis of the impact of the damage caused to the victim.In the event of accidental injuries, compensation is provided for both minor as well as major injuries, including fractures. It also covers partial as well as permanent disabilities resulting after an accident.
    Property Damage-Third party liability insurance also compensates for the accidental damages caused to third-party property. The limit of compensation for third party property damages as per the IRDA norms is Rs. 7.5 lakh. However, the insured can opt for lesser compensation and the cost of the premium will also be reduced.
    Personal Accident (PA) Cover for the Driver/Owner- If the owner or driver suffers from bodily injuries or the accident results in death, 3rd party insurance will cover the loss. And the limit is up to Rs. 15 lakh. It is further extendible to paid drivers, cleaners & conductors on payment of extra premium.

You can also extend your geographical coverage area as well as get personal accident cover for your driver, cleaner or maintenance staff involved in the upkeep of your commercial vehicles. There are add-ons available specifically for CNG/LPG vehicles.

Third Party Liability Insurance Premium for the Financial Year 2019-2020 w.e.f. From June 16, 2019, as per the IRDAI-

Vehicle Class Premium (in Rs.)
Category A1 Goods Carrying Public Carriers (except for 3 wheelers)  
GVW up to 7500 kgs 15746
7500 Kgs to 12000 kgs 26935
12000 Kgs to 20000 kgs 33418
20000 Kgs to 40000 kgs 43037
Exceeding 4000 kgs 41561
Category A1 Goods Carrying Public Carriers (except for 3 wheelers)  
GVW up to 7500 kgs 8438
7500 Kgs to 12000 kgs 17204
12000 Kgs to 20000 kgs 10876
20000 Kgs to 40000 kgs 17476
Exceeding 4000 kgs 24825
Passenger carrying four-wheelers for hire or reward with seating capacity up to 6 passengers  
Up to 1000cc 5769
1000cc to 1500cc 7584
Exceeding 1500cc 10051
Except for e-rickshaw 2595
e-rickshaw 1685
Passenger carrying four-wheelers for hire or reward with a seating capacity of more than 6 passengers  
School Bus 13874
Other Bus 14494
Passenger carrying three-wheeled vehicles for hire or reward with carrying capacity of 6 to 17 passengers 6913
Passenger carrying three-wheeled vehicles for hire or reward with carrying capacity of more than 17 passengers 15845
Passenger Carrying Motorized Two wheelers for hire or reward  
up to 75cc 861
75cc to 150cc 861
150cc to 350cc 861
Exceeding 350cc 2254

How to Buy Third-party Insurance for a Commercial Vehicle Online?

Zero documentation is required to buy third party insurance online. You can get your insurance quote within seconds by entering your registration number in the form above. This makes things really simple.

However, you will have to provide details like:

  • Vehicle Registration number
  • Engine number
  • Chassis number
  • Previous insurance policy number (if you have any)
  • Vehicle manufacturing date (mm/yy)
  • Date and city of purchase

Easy Renewal of Third-Party Insurance for a Commercial Vehicle Online

It is quite easy to renew your third party insurance for commercial vehicles online. All you need to provide is your current policy number, details about the vehicle to be insured, and some personal details.

Things to Consider When Making a Third Party Insurance Claim:

Below are some of the things that you need to consider when filing liability only claims-

  • For accidental claims, gathering evidence is important
  • It must be proved that the other party was at fault
  • File a police report and immediately inform the insurer
  • The compensation will be decided by the tribunal
  • A claim should be filed only for major damages and accidental death
  • Minor damages can be settled out of the court
  • Claims can also be filed for disabilities resulting from an accident during the policy tenure
  • Motor insurance companies usually subrogate the claim against another insurance company in the event of accidental disabilities or death

Bottom-line

While it is necessary to buy a third-party liability cover, make sure that you buy at least third-party insurance of you own a commercial vehicle. From filling insurance application to claim settlement, you can select from a range of services relating to commercial third-party vehicle insurance online.

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