Third Party Car Insurance & Its Benefits
If you are buying car insurance for the first time or renewing on a budget,Read more
What is Third Party Insurance?
The third-party insurance, also known as a liability-only policy, protects the car owner or driver in the event of an injury, death, or disablement of any third party arising due to the insured vehicle.
This type of motor insurance is legally compulsory in India under the Motor Vehicles Act, 1988, and the premium is determined solely by the Insurance Regulatory and Development Authority of India (IRDAI) based on the engine capacity or battery capacity (for electric vehicles).
Third-party car insurance is the most basic type of car insurance and does not cover any damage incurred by the vehicle itself. In case of an accident, the insurer is only liable to cover for the damages caused to the third-party property or person. Policyholders must inform the insurance company and file an FIR to claim third-party insurance.
Car insurance companies also offer a compulsory personal accident cover with their third-party car insurance plans, which provides compensation to the owner-driver in case of death, permanent or partial disability in a road accident.
Benefits of Third Party Car Insurance Policies
Here are some of the common benefits of a third-party car insurance policy in India:
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Provides Legal and Financial Cover
Third-party insurance benefits the policyholder by covering any legal liability in case of death, disability, or third-party property damage. The insurer bears all the legal and financial burden and reduces any out-of-pocket expenses for the policyholder.
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Cost-Effective
Since this type of insurance only offers basic coverage, it is a cost-effective option. The premium for a third-party insurance is based on the engine/battery capacity of the insured vehicle, and is decided by the IRDAI.
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Easy to Buy and Renew
You can easily buy and renew a third-party car insurance policy online on aggregator websites like Policybazaar.com. Since the premium stays the same across all insurers, car insurance renewals is a fairly easy and time-saving process and can be done in a few clicks.
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Ensures Peace of Mind
Third-party car insurance benefits are not only limited to legal compliance and liability coverage, but also bring peace of mind for the policyholders. You can ride without any worries, safely and responsibly, as the car insurance company will take care of any unforeseen and unexpected emergencies.
What Does Third-Party Car Insurance Cover?
A third-party car insurance covers the financial liabilities in case your vehicle causes injury, death, or property damage to someone else in an accident. This includes medical expenses, compensation for bodily injury or death, and repair costs for damage caused to their vehicle or property.
Who Should Buy Third-Party Insurance?
Third-party car insurance is only ideal for people who want to stay legally compliant and stick to a budget, keeping their car insurance costs low. It is suitable for older or discontinued models, vehicles that are rarely used, or drivers who are confident in their driving and primarily need protection only against third-party liabilities rather than coverage for their own car's damage.
What Does Third-Party Insurance Not Cover?
Third-party insurance does not cover any damage to the insured vehicle due to an accident, natural calamity, fire, theft, or vandalism. All repair or replacement costs will have to be borne by the policyholder. Additionally, third-party insurance does not provide coverage for losses arising from drunk driving, driving without a valid license, or any traffic violations.
Over to You
Third-party insurance is the most basic motor insurance. It only helps you meet legal requirements and protects you from damages caused to anyone else because of the insured car. Although the primary benefit of third-party insurance is its financial and legal support, it still offers limited coverage and does not protect your own vehicle or cover personal losses. To get broader protection for your own vehicle and yourself, you must have a comprehensive insurance policy and suitable add-on covers.
