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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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          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

          Features of Third-Party Car Insurance

          • The main feature of third-party car insurance is that it provides compensation for damages caused to a third-party by the insured vehicle
          • Third party insurance comes at a very nominal premium
          • It is the most basic and mandatory insurance cover that a policyholder can buy
          • It covers the legal and financial liabilities that the policyholder might have to bear in case of accidental involvement.
          • The insurer pays off for accidental injuries, loss of life, and 3rd party property damages
          • Personal Accident Cover for the owner/driver of the car is also offered under this insurance

          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.

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          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

            Motor 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 315 Reviews)
          (Showing Newest 10 reviews)
          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.
          Patiala, December 16, 2022
          Sbi Car Insurance
          At first, I was not sure about the online process. I spoke to my friend who is already a customer of Policybazaar, he told me that Policybazaar is the safest place that provides secure transaction methods to its customers and I can invest here. I took SBI general third party car insurance plan online for my Volkswagen Vento car.
          Rewari, December 14, 2022
          Future Generali Car Insurance
          While coming home my Maruti Dzire met with an accident with an auto rickshaw. My Future Generali third party insurance policy helped in that situation. The third party got compensated for their loss and I did not need to bear any financial burden. Thanks to Policybazaar for giving me such a good plan.
          Delhi, December 08, 2022
          Third-party liability insurance was obtained online. It was a cost-effective agreement that did not require the use of an agent and also provided tax benefits.
          Delhi, July 05, 2022
          Faster claims
          The team settled my third party claim very fast and I did not have to pay anything from my pocket. Great work Policybazaar!
          Kota, July 04, 2022
          Third party damages covered
          Called Policybazaar as soon as my car met with an accident. They helped me with all my claim related queries, and got my third party claim settled in really less time. Didn't have to pay anything from my pocket. Great experience!
          Gorakhpur, July 03, 2022
          Happy with my purchase
          Really happy with my purchase at Policybazaar. Bought a third party insurance plan after comparing quotes at Policybazaar. So far, it has been a smooth experience.
          Chhpara, July 02, 2022
          All in one place
          Bought a bundled third party and own damage plan. Wanted to check the validity of my insurance, and could find all the details about all my policies at one place in my Policybazaar account. You really don't need to switch between tabs as everything is available in your account only
          Sultanpur, July 01, 2022
          Kudos to the team
          The sales team at Policybazaar is very helpul in solving all our problems. Was confused between two third party plans and one of the sales person helped me in choosing the right one for my vehicle. Great work!
          Ranchi, June 30, 2022
          Saved on my premium
          Saved a lot on my third party insurance premium as I compared insurance rates on Policybazaar website before purchasing one. Really helpful!
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