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      Third Party Insurance

      Third-party insurance is a mandatory motor insurance policy that covers third-party related financial and legal liabilities caused due to an accident from an insured vehicle. Third-party car insurance offers compensation in case of third-party death, injury and third-party property damages.

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      What is Third Party Car Insurance?

      Third Party car insurance, also known as liability-only policy, is a mandatory car insurance policy as per the Indian motor laws. This type of insurance policy provides financial and legal coverage against third party death, injury and property damage arising due to the insured car.

      The compensation offered in case of third-party death is unlimited, while for property damage, it's limited to Rs. 7.5 lakh. This policy does not cover any damage sustained by the insured car.

      Third-Party Insurance Premium Rates

      As per the recent guidelines from IRDA, all general insurers are instructed to offer long-term third party insurance to the car owners. As a result, there is a slight impact on the premiums to be paid.

      Third-Party car insurance premium rates with effect from June 1st, 2022:

      Car's with Engine CC Third Party Insurance Premium
      Less than 1000 CC 2,094
      1000 CC to 1500 CC 3,416
      More than 1500 CC 7,897

      Third Party Premium Rates for Electric Car

      Engine KW of the Electric Car 3rd Party Insurance Premium of the Electric Car
      Not Exceeding 30 KW 1,780
      Exceeding 30 KW but not exceeding 65 KW 2,904
      Exceeding 65 KW 6,712

      Key Features of Third Party Car Insurance

      Categories Features
      Third Party Damages Covers death, disability and property damage
      Premium Nominal as decided by IRDAI
      Mandatory Yes
      Compensation  Unlimited in death
      Upto Rs. 7.5 lakh for property damage
      PA Cover Offered for owner/driver
      Own Damages Not Covered

      Why do you Need Third-Party Insurance?

      A car owner needs third-party insurance since it saves him/her from legal liabilities, accidental liabilities, or property damage of third party resulting due to an unfortunate event. In addition to this the policyholder does not have to worry about paying off for medical expenses that the third party has incurred due to accidental injuries or death.

      While there is no coverage limit in case of death, property damage coverage is limited up to Rs 7.5 lakh in the case of car insurance. The compensation offered in case of third person liabilities depends on age, income, profession and status of the third person. It is highly recommended to get third-party liability insurance if the insured vehicle is more than 5 years old.

      Key Benefits of Third-Party Insurance

      While driving on the roads, the risk of accident is always there. During that time a third-party insurance offers the right protection to the policyholder in the following manner:

      1. Offers Financial Assistance:

        It provides the policyholder with the required financial assistance and helps him/her to pay off the third-party liabilities without exhausting all the savings.

      2. Covers Legal Liabilities

        As the name suggests, third-party insurance covers all third-party legal liabilities of the policyholder if he/she causes accidental damages or injuries to a third party person. Not only does it pay for the damages caused to someone else’s car or property, but also provides compensation to the third party person in case of injury or death.

      3. Fulfils Legal Mandate

        As per the Motor Vehicles Act of India, 1988, it is legally mandatory for all vehicle owners in India to at least own a third-party insurance cover to be able to use their vehicles on public roads.

      4. Cost-Effective Policy

        The coverage offered under third-party liability insurance appears exceptionally cost-effective and rewarding in terms of its cost and premium rate.

      5. Ensures Peace of Mind

        Liability only policy helps a vehicle owner to drive in peace since help would be provided by the insured during a road mishap.

      What is Covered Under Third-Party Insurance?

      Third-party car insurance covers the liabilities arising due to third-party accidental damage, injury or death. Mentioned below are the inclusions of 3rd party car insurance in detail:

      1. Third-Party Liabilities

        Third-party liabilities result from any damages or injuries caused by the insured car to a third party during an accident. Since the accident is caused by the insured car, paying for the damages is the responsibility of the insured car’s owner. Third-party liability insurance covers legal liabilities arising out of causing:

        • Property Damages- In case someone, unfortunately, rams his/her car in a third party person’s property, such as the boundary wall or a shop, the third party insurance policy will pay for the loss or damages caused to that person. The motor insurer will cover your damage liability up to the limit of Rs 7.5 lakh.
        • Car Damages- If a car owner accidentally hits a third party’s car with his/her own car while driving, the insurance policy will come to the rescue and pay for the damages caused to that third-party’s car on the policyholder’s behalf.
        • Accidental Bodily Injuries- In case the victim suffers from a disability as a result of the accident, the compensation amount that needs to be paid will be decided by the Motor Accidents Claims Tribunal. But only 50% of the compensation amount is paid by the insurer in case the victim suffers from lost limb or partial blindness.
        • Accidental Death- If the car owner accidentally runs over his/her car on someone or causes fatal injuries to a third party person leading to his/ her untimely death, or disability the motor insurance provider will pay compensation to the victim’s family on the policyholder’s behalf.
      2. Personal Accident Cover

        Car insurance companies also offer personal accident cover to the owner-driver of the insured car under third-party car insurance. As part of this cover, the owner-driver of the car is granted compensation in case he/ she ends up suffering from a disability or dies as a result of the car accident.

        In case of the death of the policyholder, the compensation is paid to the nominee appointed by the car owner. The compulsory personal accident cover for the owner-driver is available for up to Rs15 lakh.

      What is Not Covered Under a Third Party Insurance?

      Like in the basic motor insurance plan, the standard third-party insurance is not applicable to certain situations. The following coverage is not provided under a third party car insurance policy:

      • Own Damages - It does not cover any damages sustained by the insured car, be it accidental damages, fire damages, damages due to natural & manmade calamities, or theft.
      • Drunk Driving - It does not cover any third-party liabilities if the car was being driven under the influence of alcohol or drugs.
      • Invalid License - It does not cover any third-party injuries or damages if the driver of the insured car has an invalid driving license.
      • Outside Geographical Limit - If the insured car causes third-party damages or injuries outside the geographical limit as specified in the car insurance policy, it will not be covered.
      • Unauthorized Usage - A third party liability insurance does not cover any third-party injuries or damages caused while using the insured car for illegal activities, racing, commercial purposes, etc.
      • Contractual Liability - It does not cover any claims arising out of contractual liability.
      • Undesignated Driver - If any individual, other than the owner of the car or the designated driver was driving the vehicle, the resultant damages or injuries to the third party are not covered.
      • Substantial Loss - Third party insurance for car does not cover any accidental loss or damage sustained by the third party, which has accrued from any substantial loss.
      • Nuclear Perils - It does not include any liability caused by a nuclear weapon or radioactive contamination directly or indirectly.
      • War - This insurance policy does not cover any damage, loss, and/or liability caused to the third party due to invasion, war, or any other war-like operations.

      The details in the list above are the most common exceptions; make sure to check the documents of the policy for a comprehensive list of exclusions.

      Comprehensive V/s Third Party Liability Car Insurance

      To understand the differences between third party and comprehensive car insurance better, go through the table given below:

      Third Party Liability Insurance Comprehensive Car Insurance
      The insurance premium is less Offers a wide range of coverage but comes with a considerably high premium
      Covers bodily injury and accidental death caused to the third party Covers accidental damages to the insured/insured vehicle and third-party liability as well
      Covers property damage caused to the third party Covers third party property damages and own damages to the car due to man-made and natural calamities, fire, theft, accidents
      In case the value of the vehicle is low, it's worth taking 3rd party car insurance This cover is beneficial for luxury or expensive cars that offers protection against all damages
      Only liability coverage is offered Compensates the policyholder for more than vehicular collision as both third party liabilities and own damages are covered
      This cover is mandatory under motor laws This cover is not mandatory and can be opted as per the car owner’s discretion
      No add-on covers are available A wide range of add-on covers can be bought, such as return to invoice cover, nil depreciation cover, etc.

      How to Claim Third Party Insurance?

      Step 1- Application

      The victim or the legal heir of the departed can make an application against the owner of the vehicle for third-party liability compensation.

      Step 2- Lodge an FIR

      Once the application is completed, file an FIR with the police, furnishing the required details. He/she must have a copy of the FIR and the original records of the expenses incurred by the victim.

      Step 3- Approach the Motor Accidents Claims Tribunal

      After filling the First Information Report (FIR) successfully, the next step is to register the case with Motor Accidents Claims Tribunal.

      Step 4- Get the Cover Amount

      The compensation limit is not pre decided . The insurer compensates the full amount decided by the court of law. However, IRDA limits the coverage for property damage to up to Rs 7.5 lakh.

      NOTE: The police complaint must have the following information:

      • Driver’s Licence Number
      • Witnesses’ name and contact details (if any)

      Third-Party Insurance FAQs


      • Third-Party Premium Rate Increases 16 June Onwards

        The third-party insurance premium rates are to be increased from June 16 onwards. The general insurance As per the general insurance providers, the premium rates have to be revised in order to make the segment sustainable. The increase in the premium rates of third-party insurance is to be disclosed by the Insurance Regulatory and Development Authority of India (IRDAI) every year. Due to the ongoing pandemic, it could not be possible to change the premium rates FY2020.

        Motor premium insurance has been facing a bit of traction. As per the insurance providers, there has been a decrease in motor claims in the initial months of lockdown but now as the traffic has increased it has started coming back to normal. As per the industry records, the third-party insurance premium rates increased by 4.4% to Rs. 10,650 Crore in the year 2020-2021 as compared to 2019-2020 when it was Rs. 10,198 Crore. However, in the last fiscal the overall downfall in the premium rates was 1.68% to Rs. 67,790 Crore.

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      Third Party Liability Insurance Reviews & Ratings
      4.8 / 5 (Based on 324 Reviews)
      (Showing Newest 10 reviews)
      Kolkatta, March 07, 2024
      Little discount
      I am glad to get my Taigun car insured from Policybazaar. I really liked the way of explation the SBI third party insurance paln feature by Mr. Sachin customer support features. Thanks to an executive who explained each and everything in detail.
      Gurugram, February 28, 2024
      Online process
      I preferred the online process as there are a lot of benefits of the online process like there is no involvement of an agent and sometimes customers can get small discounts on online purchases. I took Magma HDI third party car plan online for my Punto car from Policybazaar for which I did not need to go anywhere else.
      Hyderbad, February 26, 2024
      Little discount
      After comparing many car plans on different platforms I found the right plan on Policybazaar. I bought my Iffco Tokio third party plan online.
      Surat, February 22, 2024
      Good service
      Mr. Sandeep customer support executive explained everything to me about my third-party car plan and its coverage I really appreciate his hard work. under his guidance, I took kotak car insurance for my Dzire car.
      Delhi, February 17, 2024
      Financial support
      I have secured Alto my car by taking the United India tihird party plan from Policybazaar. Now it will help me in securing my savings from being wasted on unwanted expenses. Also, the comparison is pretty easy on their website.
      Nagpur, February 08, 2024
      Helpful executive
      Customer support executive who was suggesting and helping me find a better plan for my Maruti Wagon R car was very good at his job. The interaction with Policybazaar team was fruitful. I chose the Iffco Tokio limited third party plan under the guidance of an Mr. Raman executive. The services were very smooth.
      Mumbai, February 05, 2024
      Excellent customer service
      Policybazaar provides such quick response. All my doubts were cleared by the team regarding Reliance third party car insurance for my 2018 Maruti Suzuki Ciaz. I have got excellent customer service from the beginning to the end of the process.
      Guna, January 30, 2024
      Cooperative team
      I compared lot of plan features and price in a while and finally I bought third party insurance policy of royal sundaram car insurance for my Renault Duster 2015 model. Their team was so cooperative and knowledgeable.
      Gandhi Nagar, January 08, 2024
      Hassle free experience
      I have bought liberty third party car insurance plan for my Maruti Suzuki Swift Dzire. I was amazed as I got it in just a few clicks and even got soft copy instantly. I am very happy with Policy Bazaar's hassle free experience and great customer service.
      Delhi, December 19, 2022
      Iffco Tokio Car Insurance
      Anyone who will buy any kind of plan from Policybazaar will definitely love to come here again as Policybazaar provides excellent service to its customers. When I was buying IFFCO Tokio third party car insurance for my Swift car, Policybazaar took care of my needs.

      #Rs 2094/- per annum is the price for third-party motor insurance for private cars (non-commercial) of not more than 1000cc

      *Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB. Actual time for transaction may vary subject to additional data requirements and operational processes.

      ##Claim Assurance Program: Pick-up and drop facility available in 1400+ select network garages. On-ground workshop team available in select workshops. Repair warranty on parts at the sole discretion of insurance companies. Dedicated Claims Manager. 24x7 Claim Assistance.

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