Car Insurance

Third-party Car Insurance – Here is What You Need to Know

Third-party Car Insurance

Car insurance is a form of agreement between the insurance provider and the owner of the vehicle where the owner of the vehicle pays monthly installments or premiums to the insurer. In return, a predetermined list of insurances and financial protection against losses is offered.

According to the Motor Vehicles Act of 1988, anyone who has or drives a car in India ought to have third-party insurance coverage. A third-party car insurance policy guards you against any legal or accidental obligation, monetary loss, and property damage in case of a third-party property loss, damage or bodily injuries, or loss of life.

Important Characteristics of Third-party Insurance

  • All motor vehicles need to have third-party insurance. 
  • Insurance for third parties does not cover harm done to the insured person, only harm done to others by the insured.
  • The damaged third party is the actual beneficiary of third-party insurance; the insured or policyholder is only formally the beneficiary of the policy. In reality, the insured individual is never even involved in the payment; the insurance company always makes the payment directly to the third party.
  • Since the insurance covered by third-party policies is for legal responsibility, which cannot be predicted in advance, the premiums are not based on the worth of the item being protected. It is a fixed amount decided by the IRDAI. 
  • In order to recover damages from the insured, you must first demonstrate both that the insured was at fault and that the injury resulted from that negligence.
  •  Third-party insurance includes legal representation.

Advantages of Third-party Insurance

The advantages of third-party insurance coverage are as follows:

  1. Legal defence and monetary support: Third-party insurance coverage will financially shield you in the event of the demise or incapacity of a third party, as well as in the event that a third party’s vehicle or any property is damaged. This makes sure that your financial and legal obligations in the event of a third-party claim are met.
  1. Peace of mind: Having a third-party auto insurance policy provides you comfort in the event of a stressful or terrible circumstance that drains your finances. Consequently, you will receive immediate stress relief and aid in trying to deal with the incident rather than worrying about these costs.
  2. Cost-efficient and helpful: A third-party insurance policy has very low rates that are easy on the pocket. The premium amount for third-party insurance is determined by the market forces of demand and supply. Rather they are fixed by IRDAI at a very reasonable rate. 
  3. Ease of availability: Third-party car insurance is widely accessible and simple to get or renew online due to its legal need. You can use it whenever it is convenient for you. Whenever you buy a car or any other vehicle, you can easily get third-party new car insurance from the dealer itself. 

How does Third-party New Car Insurance work?

The insurance company must be notified right away of any damage. You can accomplish this by phoning the customer service line. The insurance provider often arranges for the car to be towed to the closest mechanic. You must provide the following documentation when filing a claim:

  • A copy of your license
  • Properly completed and signed claim form
  • A copy of the registration document (RC)
  • Copy of the first information report (FIR)
  • Insurance/Policy Statement

What Does Third-Party Car Insurance Cover?

Your vehicle and you remain protected from a variety of third-party damages, thanks to third-party car insurance:

  1. Damages to the car or property: If your insured vehicle gets involved in an accident, the cost of your third-party insurance covers injuries to people, damage to their property, and damage to their vehicles.
  2. Damages resulting from the injuries or death of a third party: If your insured vehicle is involved in an accident that results in the injuries or death of a third party, your third-party car insurance will shield you from financial losses resulting from the damage claims made by the third party or his\her family.

The policyholder is protected by third-party car insurance against unintentional injury, disability, or death of a person from a third-party, as well as related medical expenses and court costs, if applicable.

Additionally, it protects against property damage caused by an accident affecting the insured vehicle to third parties. The damage you cause to your car or yourself is not covered by this policy.

What does third-party car insurance not cover?

  • The third-party auto insurance coverage only covers harm done to a third party’s person or property, as the name implies.
  • Damage to your car is not covered.
  • Additionally, you are not permitted to file an accident claim more than once.
  • The victim is prohibited from claiming with their insurers if the amount of compensation the court grants is less than the price of repairs.
  • The maximum responsibility for the insurer is INR 7.5 lakhs, any compensation received more than this amount must be paid by the owner of the car.

 Your legal compliance with the Motor Vehicles Act is ensured by having third-party insurance coverage. The four-wheeler third-party insurance covers claims for hospitalization or medical expenditures as well as disability claims resulting from the damage done to the third-party person in the event of physical injuries or death of a third-party individual by the insurance-covered car. The third-party car insurance will pay for partial or even complete damage to the insured vehicle or any other property.

Additionally, if a third party initiates a lawsuit against you for damages done by their covered vehicle, the third-party insurance policy will also cover your financial losses as a result of your legal obligation. However, be careful while choosing your insurance company. To invest in insurance coverage that best suits your needs, pick a reputable car insurance provider and get an online car insurance evaluation.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.