Third Party Motor Insurance overview

Third Party Insurance

The Term ‘Third-Party Insurance'

As per Motor Vehicles Act, 1988, 'Third Party Insurance' is a statutory requirement. The idea of the third party comes from the fact that the prime beneficiary of the policy is neither the original insured nor the insurance company, but a pretentious third party. Herein, this motor third party insurance policy will cover for the fiscal liability that is incurred by the owner of the car in the event of unforeseen demise or permanent disability of the third party, which was crashed by the vehicle of the policy holder in an accident. As per the rules, Insurance Regulatory and Development Authority (IRDA) of India compute the damages.

3rd Party insurance Policy

Why 3rd Party motor insurance Policy

Why Do You Need Third Party Motor Insurance?

Besides the legal clause, Third Party Insurance comes in handy when your vehicle hits another vehicle. You can’t measure the level of damage as a result of an accident - it might lead to death as well. In such instances, the victim is allowed to register a case claiming for compensation. Here your third party motor insurance comes into the picture. It covers the insured vehicles in case any liability claim arises out of bodily injury, property damage, or death of a person. As per the guidelines of IRDA third-party property damage cover is limited up to 7 lakhs. Moreover, sticking to third party liability insurance is a wise idea if you own an old car and don’t want to spend your hard-earned money on it.

Third party motor insurance can be categorized into two parts:

  • Third Party Liability Car Insurance
  • Third Party Liability Two-wheeler Insurance

Third Party Insurance for Car

Third Party Liability Car Insurance:

Third Party Car Insurance is a risk cover, under which the insurer compensates any legal liabilities claimed by the other party, in case the insured vehicle is at fault. However, as per the Motor Vehicles Act 1988, Section 146, plying an uninsured vehicle on Indian roads is an offence. This is why liability insurance is also known as ‘Act Only’ plan. This plan doesn’t cover the insured or his car.

Third Party Insurance for Two Wheeler

Third-Party Liability Two Wheeler Insurance:

Motor Insurance in India is necessary by law for all the registered vehicles and plying on the roads. This rule is applies for two-wheelers as well. Non-compliance may lead to the enforcement of legal punishment, which includes hefty fines, and trial under the laws of road safety under the Motor Vehicle Act.

Enforcement of legal punishments can be due to non-compliance that will include hefty fines, and trial under the laws of road safety under the Motor Vehicle Act. Owing to the risk associated with this type of vehicles (bikes), insuring it with an adequate plan is an ideal decision to keep the stress at a bay.

Third Party Insurance for Private Vehicle

Third-Party Insurance for Private Vehicle:

Policy Coverage:

Third Party Liability Insurance for Private Vehicle covers:

  • Damage to the property of the third party
  • Bodily injury or death of the third party
  • Permanent Total Disability of the driver/owner of the insured vehicle
  • Accidental death of the driver/owner of the insured vehicle

Exclusions:

  • Liability claims on contractual basis
  • Liabilities that might occur directly or indirectly from materials of the nuclear weapon.

Third Party Insurance for Commercial Vehicle

Third-Party Insurance for Commercial Vehicle:

Policy Coverage:

Third Party Liability Insurance for Commercial Vehicle covers:

  • The policy covers your legal liability for the injury or damage caused by you to the third party.
  • Demise or any bodily injury to the third party
  • Property damage caused to the third party
  • Permanent Total Disability of the owner or driver of the insured vehicle

How Does the Third Party Insurance Works

Step-wise Process of Claiming Third Party Insurance

Step 1- Application:

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

Step 2- Lodge an FIR

Once the application is completed, file an FIR with the police, furnishing the required details. You 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

There is no pre-decided limit for claiming third party insurance. The insurer compensates the full amount decided by the court in its final verdict. However, IRDA limits the cover for property damage up to 7 lakh.

NOTE: The police complaint must have the following information in the First Information Report:

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

Third Party Insurance in India

Comprehensive V/s Third Party Liability Car Insurance

When you meet with a road accident, whom do you blame?

Do you blame yourself, the careless driver or the roads filled with potholes, or hard luck? Nobody takes the charge or no one wants to pay out-of-the-pocket. That's where a comprehensive & third party car insurance policy comes to your rescue and acts as a SUPERMAN!

When you already accept the importance of owning car insurance, the next question that immediately comes to your mind is, "What kind of car insurance should I choose?"

We'll help you. Car insurance can be classified into two types: Third-party Car Insurance and Comprehensive Car Insurance.

However, some car owner may think their luck would do them no harm; there is a legal side as well. Yes, having third party insurance is mandatory as per Motor Vehicle Act, 1988, of India.

Third-party car insurance protects you from any liability claimed by a third party due to injury or property damage in an accident. Without this cover, you are not allowed to ply your vehicle on roads. Comprehensive car insurance is quite extensive. It safeguards your vehicle from natural and man-made calamities. Any damage to your car due to vandalism, earthquake, flood, storm, strike, riot, terrorist attack, or theft etc. will be taken care of by this plan. However, if we compare both these plans on the grounds of benefits offered, the comprehensive plan appears more appealing. Here's why:

Third Party Liability Insurance Comprehensive Car Insurance
The insurance premium is less Offers a wide range of coverage but comes with considerably high premium
Covers bodily injury and accidental death caused by the insured Covers accidental damages to the insured and third-party liability as well
Covers property damage caused to the third party Covers damages owing to man-made and natural calamities
Takes care of legal liabilities, if any Compensates the insured for more than vehicular collision
In case the value of your vehicle is low, it's worth taking third party car insurance This cover is beneficial for luxury or expensive cars that offers protection against all damages

 

Motor Third Party Insurance Premium Rates 2017

Third-Party Insurance Premium Rates with effect from April,1 2017:

S. No. Category Description of Vehicle Class Premiums w.e.f. April 1, 2017 (in Rs.)
1   Private Cars*  
    Less than 1000 CC 2,055.00
    More than 1000CC but less than 1500CC 3,132.00
    More than 1500CC 8,630.00
2   Two Wheelers  
    Less than 75CC 569.00
    More than 75CC but less than 150CC 720.00
    More than 150CC but less than 350CC 970.00
    More than 350CC 1,114.00
3 A1 Public Carrier Vehicles that Carry Goods (other than 3-wheelers)  
    GVW less than 7500 Kgs 14,390.00
    More than 7500 Kgs but less than 12000 Kgs 21,511.00
    More than 12000 Kgs but less than 20000 Kgs 31,608.00
    More than 20000 Kgs but less than 40000 Kgs 34,591.00
    More than 40000 Kgs 36,120.00
4 A2 Private Carrier Vehicles that Carry Goods (other than 3-wheelers)  
    GVW less than 7500 Kgs 7,938.00
    More than 7500 Kgs but less than 12000Kgs 14,330.00
    More than 12000 Kgs but less than 20000 Kgs 9,871.00
    More than 20000 Kgs but less than 40000 Kgs 14,805.00
    More than 40000 Kgs 23,317.00
5 A3 Public Carriers Vehicles Carrying Motorised 3-wheelers and Motorised Pedal Cycles  
    Other than E-carts 5,680.00
    E-Carts 3,969.00
6 A4 Private Carriers Vehicles Carrying Motorised 3-wheelers and Motorised Pedal Cycles  
    Other than E-carts 4,200.00
    E-carts 3,438.00
7 B Trailers  
    Agricultural Tractors up to 6 HP 714.00
    Vehicles that include Special and Miscellaneous Type of Vehicles (Class-C) 1,830.00
8 D Special Types of Vehicles  
    (i) Agricultural Tractors controlled by Pedestrian with 6 HP, Plane Loaders and Hearses 1.256.00
    (ii) Other Special and miscellaneous types of vehicles 5,351.00
9 E Motor Trade (Road Transit Risks)  
    (i) Distance not more that 2400 kms 1,088.00
    (ii) Distance more than 2400 kms 1,308.00
10 F Motor Trade (Road Risks) (Excludes Motorised 2-wheelers) (Trade Certificate or Named Driver)  
    1st Name certificate or driver 1,108.00
    For additional certificates/drivers up to 5 (per certificate/driver) 536.00
    For additional certificates/drivers more than 5 but less than 10 (per certificate/driver) 345.00
    For additional certificates/drivers more than 10 but less than 15 (per certificate/driver) 299.00
11 F Motor Trade (Road Risks) (Motorised 2-wheelers) (Trade Certificate or Named Driver)  
    1st Name certificate or driver 530.00
    For each additional certificate/driver 264.00
12 C1a 4-wheelers used to carry passengers for reward or hire with a capacity of maximum 6 passengers Basic TP Premium (A) Premium (per licensed passenger) (B)#
    Less than 1000CC 6,396.00 1,230.00
    More than 1000CC but less than 1500CC 8,408.00 1,035.00
    More than 1500CC 11,144.00 1,183.00
13 C1b 3-wheeler used to carry passengers for reward or hire with a capacity of maximum 6 passengers    
    E-rickshaw 2,426.00 1,161.00
    Vehicles other than E-rickshaw 1,575.00 753.00
14 C2 Vehicles with 4 or more wheels used to carry passengers with a capacity of maximum 6 passengers for hire or reward 13,584.00 830.00
15 C3 Motorised 3-wheeler passenger vehicles used to carry passengers for reward or hire with a capacity of more than 6 passengers but less than 17 passengers 5,817.00 1,161.00
16 C2 3-wheeler passenger vehicle used to carry passengers for reward or hire with a capacity of more than 17 passengers 12,189.00 745.00
17 C4 Motorised 2-wheelers used to carry passengers for reward and hire    
    Not more than 75CC 790.00 532.00
    More than 75CC but less than 150CC 790.00 532.00
    More than 150CC but less than 350CC 790.00 532.00
    More than 350CC 2,261.00 532.00
*Vintage Cars: A discount of 25% shall be permitted for private cars under the Vintage Cars segment that is certified as Vintage Cars by Vintage and Classic Car Club of India as the erstwhile IMT.
# TP Premium is the total of the Basic TP Premium (A) along with an amount derived by the multiplication of the Licensed carrying capacity by the amount in (B)

 

Key Benefits Third Party Insurance

Key Benefits & Importance of Third-Party Motor Insurance:

Offers Legal Cover and Financial Assistance:

The legal liability of the insured person is covered under the third-party insurance policy in the case of disability or demise of the third party, and any damage or loss to the property of the third party. The third-party liability policy takes care of the financial and legal burden in such circumstances. Despite the fact that the direct beneficiary is neither the insurance company nor the insurer, but a third party, this is the most crucial benefit that a third party insurance secures for the owner or the driver of the insured vehicle.

Easy, Seamless and Fast ­Process to Acquire the Third Party Insurance:

The third party liability insurance policies can be bought easily, and are easy to access or renew. You can also buy or renew these policies online which is a quick and simple process to carry out while choosing the third party insurance cover. Therefore, you can easily avail of it according to your convenience and time.

Lucrative and Beneficial to the Policyholder in any Unfortunate Event:

The coverage offered under a third party liability insurance appears exceptionally cost-effective and rewarding in terms of its cost and premium rate. Even if you have to use this as either an essential or an add-on part of the main policy, it benefits you fully. However, at the time of calculating the compensation amount, insured’s annual income is considered.

Features of Third Party Insurance

Features of Third-Party Car Insurance:

The following is taken care of by the standard third party car insurance in case of the accident caused by your vehicle results in:

  • Death or bodily injury to a third party.
  • Damage to third party property.
  • The accidental death of the vehicle’s Owner or Driver.
  • Permanent Total Disability suffered by vehicle’s Owner or Driver.

Clearly, the benefits that arise from such a clause in the third party liability car insurance policy bought by you are crucial to your core expectations. The following salient features are a part and parcel of the plan:

  • The policy holder, the insured or the injured third party are the beneficiaries of the third party liability insurance. These beneficiaries are only the nominal beneficiary of the third party car insurance. In practise, the money is directly paid to the third party or his solicitor by the insurance company.
  • Injuries to the insured himself are not covered under third party car insurance. It covers the injuries caused by the insured to the rest of the world.
  • In these plans, third party car insurance premiums do not differ with the insured vehicle’s value as it is the 'legal liability' and it is impossible to know beforehand what that liability would be.
  • Third party car insurance involves lawyers’ help.
  • With an option to renew or buy third party insurance online, the process is easy, quick, and seamless and entirely depend on your time and convenience.

Third Party Insurance Exclusions

What is not covered?:

Like, in the main motor insurance plan, the standard third party insurance is not applicable to certain situations. The following is a list of a few such situations:

    • Accidental damage/liability/loss outside any particular geographical boundary
    • Claims arising out of contractual liability
    • If any individual, other than the owner or the designated driver was driving the vehicle.
    • The third party incurs accidental loss or damage, which has accrued from any substantial loss.
    • Liability, caused by a nuclear weapon or radioactive contamination, directly or indirectly.
    • Any damage, loss and/or liability caused due to invasion, war or any other warlike operations.

The details in the list above are the most common exceptions; you must check your documents of the policy for a comprehensive list.

Compare Third Party Insurance Online and Save More!

Once you’ve decided on the plan, the next step is to compare third party motor insurance online. Online comparison helps you get the best deals that meet your requirements. You can compare the plans on the parameters like benefits, features, coverage, claim settlement process, premium etc. We, at Policybazaar.com, help you compare these plans in the blink of an eye. You just need to visit our official website, fill in the relevant information and compare third party car insurance plans from a relatively large number of insurers. Once you find a plan that suits your budget and requirements, then you can proceed to purchase it directly from our site. With an adequate Third Party Insurance, ride your passion into the sunset with gusto!

What is third-party insurance?

Ans:

In simple words, when any accident results in death/injury/damage to a third party by your vehicle, then the offended party has the right to raise a claim for damages. This claim will be satisfied by your third-party liability policy. In exchange for this, you will not receive any monetary benefits.

As a part of this policy, what is the highest compensation offered?

Ans:

In the case of death or bodily injuries, there is no particular ceiling with reference to the amount of compensation. However, in the case of damage to the property of the third party, the insurance company will compensate only a maximum of Rs. 7.5 lakhs.

Can I skip buying third-party car insurance? I drive my vehicle really well.

Ans:

No. Third-Party Car Insurance is obligatory for all motor vehicles. Third party risk insurance is compulsory under the statute of the Indian Motor Vehicles Act, 1988. You may be a good driver, but it does not negate the fact, that the vehicle you drive can become the victim of a disaster that was caused by another vehicle. In such a situation, you will be grateful that the driver involved has a third-party car insurance cover that you can raise a claim on.

What documents do I need to submit while raising a third-party motor insurance claim?

Ans:

The documents you need to submit include:

  • Copies of FIR (First Information Report) as registered by the police
  • Any proof related to the costs that are to be claimed..
  • A report from the Surveyor

How much time do I get to raise a claim on the third-party liability car insurance policy after an accident?

Ans:

As it is said that the early bird catches the worm, you must begin the process by reporting a case with the Motor Accidents Case Tribunal within a time span of 60 days from the occurrence of the accident.

Who can purchase a 3rd party insurance?

Ans:

Owner of any vehicle, who has registered it with the RTA, i.e. The Regional Transport Authority in India can buy the third-party insurance.

Can I buy third party insurance online?

Ans:

Yes. Several insurers offer you the benefit of buying this insurance plan online. You can pay via secure payment gateways and get the policy, hassle free.

What is the duration of the policy?

Ans:

The validity of a third-party insurance plan is usually of one year and has to be renewed before the due date. Please note that you will not be provided with the grace period for making payment of the premium.

If I want to sell my car, can I transfer the third party liability auto insurance to the new owner?

Ans:

If you sell your vehicle to another individual, you can transfer the insurance in the name of the new buyer. The news buyer (transferee) has to submit an application for the transfer of insurance with the insurer, within the tenure of 14 days from the date of transfer of the vehicle in his name and after the endorsement premium is paid for the remaining duration of the policy.

Is the Service Tax applied and what is the amount?

Ans:

Yes. You are required to pay Service Tax. The amount would depend on the aforementioned rules of law.

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