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|
|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|
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.
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:
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.
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.
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.
The coverage offered under third-party liability insurance appears exceptionally cost-effective and rewarding in terms of its cost and premium rate.
Liability only policy helps a vehicle owner to drive in peace since help would be provided by the insured during a road mishap.
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:
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:
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.
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:
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.
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.|
The victim or the legal heir of the departed can make an application against the owner of the vehicle for third-party liability compensation.
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.
After filling the First Information Report (FIR) successfully, the next step is to register the case with Motor Accidents Claims Tribunal.
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:
Bajaj Allianz Third Party Car Insurance
Chola Ms Third Party Car Insurance
Digit Third Party Car Insurance
Future Generali Third Party Car Insurance
HDFC Ergo Third Party Car Insurance
IFFCO Tokio Third Party Car Insurance
Kotak Mahindra Third Party Car Insurance
Liberty Third Party Car Insurance
Magma HDI Third Party Car Insurance
National Third Party Car Insurance
New India Assurance Third-Party Insurance
Oriental Third Party Car Insurance
Raheja QBE Third Party Car Insurance
Reliance General Third-Party Car Insurance
Royal Sundaram Third-Party Car Insurance
SBI General Third-Party Car Insurance
Shriram Third Party Car Insurance
Tata AIG Third Party Car Insurance
United India Third-Party Car Insurance
Universal Sompo Third Party Car Insurance
Zuno Third Party Car Insurance
Apart from these, there are personal accident insurance cover and other add-on covers, such as zero depreciation cover, roadside assistance cover, NCB protector and so on.
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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