The main purpose of the third Party Car Insurance is to provide financial and legal protection to the policyholder in case of an accident causing physical injury, death, or disability to the third party or damage to third-party properties.
Third-party car insurance is the basic insurance that is compulsory for every car owner to hold while driving. It gives coverage to the third parties for their damages caused due to an accident with the insured car. Also, being a mandatory cover, it delivers legal compliance as well along with the coverage.
The third party car insurance gives you coverage from financial liability in case your vehicle was involved in any accidents that might have caused damages to life, limb, other vehicles, or property. This type of car insurance is also known as 'act only cover. It reduces the worries of the car owner in case of financial liability towards the third party in case of an accident.
- Compensation in case of death and injury is up to Rs. 7.5 lakhs
- Lower premiums
- You don’t have to worry about paying someone else’s repair bills anymore.
What is covered under Third Party Car Insurance?
Third Party Liabilities
Any injuries or damages caused to a third party is covered.
Third Party Property Damages
Any damages caused to a third party’s property due to your car in an accident is covered. However, the coverage limit is of 7.5 lakhs
Third Party Car Damages
Any damage caused by your car to a third party’s vehicle is covered.
Personal Accident Coverage
A few companies provide compensation in case your car accident results in your disability or death. The cover amount in case of death can is up to 15 lakhs.
Accidental Death Coverage
Compensation is provided in case you accidentally run over your car on a person causing fatalities leading to the victim’s death.
Bodily Injuries Due To Accident
Any disability cause by you to a third party due to an accident is covered. However, only 50% of the compensation is paid in case the third party person suffers from partial blindness or loss of a limb.
How Third party Car Insurance Works?
In order to better understand the concept of third-party car insurance, For example, in the event of a car accident, the parties involved are as follows:
- First party: The insured person or policy holder
- Second party: The insurance company
- Third party: The person who claims for the damages caused by the first party.
|Type of Damage
|Loss of Life
|Loss of Limb/ permanent disability
|| Limited to medical expenses
|| Up to INR 7,50,000
Why Do You Need Third Party Insurance for Car?
- It’s mandatory by law for all vehicles.
- It protects you against any damages, loss of property, bodily injuries caused to the third party or their death.
- Third party insurance also protects you against man-made and natural calamities.
- Financial Benefit: A third party car insurance is important as it protects you from paying traffic fines and financial losses arising from third party liability.
- Cost-effective: Being a basic and mandatory car insurance cover for only third-party losses, a 3rd party insurance policy is quite affordable.
- Driving license: If you do not have a valid third party car insurance policy, it could lead to your driving license being suspended temporarily. Therefore, with a third party car policy, you can avoid having your license seized.
- Legal Protection: With a third party car insurance policy, you can avoid legal issues and processes that involve paying fines and other costs.
- Safety Net: If you buy third party car insurance and your insured car is part of an accident, you are safe from third party financial damages as your policy covers these losses.
What is Third Party Car Insurance?
Third-party car insurance provides coverage against any property damages, physical injuries or death of third parties if the car owner is at fault. For example, bumping the insured car with another car on the road.
It covers third-party liabilities such as:-
- Property damages
- Damages to the vehicle
- Bodily injuries, and
- Death of the 3rd party.
Benefits of Third Party Car Insurance:
1. Financial Assistance & Legal Cover:
2. Peace of Mind:
- If you are unable pay for any damages or losses caused to the third-party vehicle or person, you run into legal liabilities.
- These legal liabilities can give a heavy financial blow to you & can even lead you to bankruptcy.
- A third-party car insurance helps you to pay off these liabilities without disturbing your savings.
3. Saves You Legally:
- Having third party liability car insurance helps you relax & drive in peace without worrying.
- Due to third party liability insurance you don’t have be concerned about making financial arrangements in case of any accident.
- The policy provides financial protection from unforeseen 3rd party liabilities.
4. Low Premium:
- It’s mandatory by law to have third party insurance.
- If you don’t have third party insurance, you’ll have to pay a heavy fine or even face imprisonment.
- Buying third party insurance saves you from these legal perils.
- The coverage offered under third party insurance is up to 7.5 Lakhs.
- However, the premium amount can be as low as 2000/- for a car below 1000cc and around 8000/- for a car which has more than 1500cc.
- Liabilities, losses or damages to the third party that were due to any consequential losses
- Claims resulting out of policy contractual liability.
- Claims resulting out of using the car outside the 'limitations as to use' terms or clauses.
- Accidental liabilities, losses or damages that you bear outside your policy's geographical area.
- Liabilities, losses or damages due to war, war related operations or invasions.
- Liabilities, losses or damages due to nuclear weapons or radioactive weaponry.
- When the car was driven by someone else who isn't the car owner & policy holder.
Third-Party Car Insurance Premium:
The IRDAI takes premium amount decisions for 3rd party car insurance. When it comes to comprehensive car insurance, your insurers take many things into account before deciding the premium amount. But the third-party car insurance price depends only on the cc of your car. The IRDAI has determined a fixed cost depending on the engine capacity of your motor vehicle.
|Engine Capacity of the Car
|| Premium Rate
|Below 1000 cc
|| INR 2,072
|Between 100cc to 1500cc
|| INR 3,221
|| INR 7, 890
Car insurance cost of third party premium is decided by the IRDA and is constant for all the insurance companies. Third party premium changes with the cubic capacity and the age of the vehicle. Third party premium rates are decided by IRDA and are subject to change each year depending on the previous year's premium collected, claims settled, and many other factors. Car insurance rates would increase if your car is fitted with the Bi-fuel system and other electrical and nonelectrical accessories. Both the own damage and third party premiums would be increased in this case.
1. Compulsory TP: The Motor Vehicles Act, 2019 has made it mandatory for the owner of the car to have at least a third party insurance if not the comprehensive insurance cover. The fine for not having the compulsory third party car insurance is up to Rs.5000/- and/or imprisonment of up to 3 months. There are three slabs for the third party car insurance premium depending on the cubic capacity of the car. The highest premium to be paid for a car would typically not be more than Rs.10k which provides coverage for a year. Having a Third party insurance can save your hard-earned money from being paid as a fine and prevent you from imprisonment.
2. Death and Disability Claim: The death and disability accidental claims are covered under the third party car insurance policy. In general the third party claims are to be reported to the insurance companies and will be settled by the honorable courts. The amount of compensation to be paid by the insurance companies to the kin of the deceased is decided by the honorable courts after taking many factors into consideration. These factors include the earning capacity of the deceased and other factors such as the age of the deceased etc.
In the absence of the third party car insurance policy, the compensation awarded by the honorable courts for third party death and disability claims should be settled from your own pocket. There can be instances where the courts action your property to settle the third party claims in the absence of valid third party insurance.
3. Property damage claims: The third party property damage due to your car is covered under the third party car insurance policy. The Third party property damage is covered up to Rs.7.5Lacs under the third party car insurance. The limit under this section can also be restricted to Rs.6000 for a decrease in the overall premium to be paid under your third party car insurance policy.
4. Personal accident cover for owner/driver: Personal accident cover for owner/driver is mandatory for a sum insured of Rs.15 Lacs to be taken under the compulsory third party car insurance policy. The personal accident cover for the owner/driver covers the claims due to the death or disability of the owner/driver at the time of accident whilst driving the insured vehicle.
5. Need for Third party car insurance: The need for a valid third party car insurance has increased these days due to the increasing road accidents resulting in the loss of lives of the passengers. A third party car insurance death claim may result in the loss of more than one life and the claim amount may run up to several Lacs in some instances where the car owner/driver might not be able to pay without the help of the insurance company.
Advantages of a Third-Party Car Insurance:
There are several advantages of third-party car insurance. Let’s look at the advantages that you will be eligible for in case you buy third-party car insurance:
- Enables You to Drive Legally
- It Will Save You Time
- Coverage for Third-Party Person in case of Personal Damages
- Coverage for Third-Party Property or Vehicle Damages
- Protects you in case of any physical injuries
- Protects you from Unexpected Losses.
Disadvantages of a Third-Party Car Insurance:
Nothing is perfect, not even your third-party car insurance as it comes with several disadvantages as well. Here is the look at the disadvantages that you might face if you buy third-party car insurance:
- Doesn't cover your own damages
- Doesn't cover damages due to natural calamities
- You can’t opt for add-ons.
Third Party Car Insurance vs Comprehensive Car Insurance:
|| Third Party Car Insurance
|| Comprehensive Car Insurance
|| A 3rd party insurance offers financial protection to you against damages caused to a third-party vehicle or property or the death or injury of a third-party person.
|| A comprehensive car insurance policy protects your insured car against own-damage and also covers third-party damages to a vehicle or property and the death or injury of a third-party person.
|| Since third party insurance coverage is limited only to third-party damages, it is easily affordable when compared to a comprehensive car insurance policy.
|| The coverage provided by a comprehensive policy is extensive, and hence, it is costlier than third party policy.
|| A third party car policy coverage cannot be enhanced with add-ons and other such benefits since the policy is only meant for covering third-party losses.
|| For an extra premium, you can enhance your comprehensive cover with add-ons such as Zero Depreciation, Roadside Assistance, etc.
How to Claim for a Third Party Car Insurance?
The process to claim third party car insurance is straight forward, follow below steps:-
Step 1: intimate the insurer you have met with an accident resulting in the third party’s loss/damage/injury
Step 2: The insurer needs to be provided with information like the date and time of the accident, details of insurance and policyholders involved, description of injuries sustained, photographs of the incident, eyewitnesses, etc.
Step 3: the insurer will access all the documents and evidence to settle the claim with the third party accordingly.
Things to Consider When Making a Third-Party Car Insurance Claim:
- In case of an accident, the respective third-party must file an FIR at the time of damage - post which the insurance company must be notified as well. Without this, the required compensation can’t be made.
- In an accident, it’s important that the third-party has viable evidence to prove the fault of the opposition party.
- In case of minor damages and losses, it’s always advised to try and settle them out of court since the process of filing a FIR and dealing with the Motor Vehicle Tribunal is often time-consuming.
- As per the rules and regulations of the IRDAI, it is up to the Motor Accident Claims Tribunal to decide on the claim amount. While there’s no upper limit on personal damages to a third-party, there is a limited liability of up to Rs 7.5 lakhs in case of damages and losses caused to a third-party vehicle or property.
Top Third Party Car Insurance Companies in India 2022:
How to Buy/Renew Third Party Car Insurance Policy in PolicyBachat?
At PolicyBachat.com buy or third party car insurance renewal online is easy and quickly sitting at home. Follow the below-mentioned steps to renew your policy within 5 minutes.
- Go to 'Car Insurance Online' to compare quotes above this article. Fill in the registration number of your car and required details and tap on 'Start Save Money.
- On the quotes section, either go with your current provider or choose another one to suit your needs.
- Make the payment and you will receive the confirmation at your email address. If assistance needs Call: 1800-123-4003.
Third party Car insurance cost premium can be reduced if your car insurance renewal is done online using the link third party Car Insurance price comparison to the offline mode of renewal where the premium would be slightly higher compare prices to the online premium.
Best third party car insurance quotes are available on www.policybachat.com for any assistance call: 1800-123-4003.
Third Party Car Insurance FAQs:
Is third-party car insurance enough?
As you cannot get add-ons on the third-party motor insurance, hence it is not enough. In case your own vehicle sustains any loss, you will have to pay from your pocket. Hence, it is suggested you get comprehensive car insurance.
How does car insurance companies calculate third party car insurance amount?
3rd party car insurance price is not actually calculated by the insurance company. IRDAI has made it a mandatory thing under the Motor Vehicle Act, 1988; it calculates the premium amount on the engine capacity of the car.
What Documents Do I need to file a third-party insurance claim?
You will need the following documents for filing a claim:
- Copy of the FIR
- Proof of the damage and cost incurred on the same account
- Verdict of the court if the matter is taken up by the tribunal
What is the maximum compensation given by a third-party insurance company?
In case of death or permanent disability, there is no limit to the amount of compensation. In case of damage to property, the maximum compensation has been stipulated to 7.5 lacs.
Can I buy a zero depreciation add-on cover along with my third party car insurance plan?
No, a third party car insurance plan, though mandatory, offers limited coverage against third party losses only. Hence, you cannot include any add-ons, even zero depreciation add-ons, to your third party car insurance plan.
If you claim third party car insurance, will you lose your NCB?
No, you cannot lose your No Claim Bonus discount by filing a third party car insurance claim because this discount on premiums is only offered on Own Damage or comprehensive car insurance policies.
What documents should I submit when raising a claim for third-party car insurance online?
If the third party affected by your insured vehicle wants to file a claim, they will have to submit an FIR charge sheet to request compensation for their losses. While filing a third-party car insurance claim online, apart from the FIR, other documents needed are the car insurance policy details, the registered contact details, the signed claim form with all the details, proof of the event, registration details of the insured vehicle and a copy of the driving license. In case there are injuries caused to a third-party person, then a copy of the medical bills will also be needed.
What happens if I am caught driving without a valid third-party liability insurance policy?
If you are caught driving without a valid third-party liability insurance, you will be liable to pay a fine of Rs 2,000. Additionally, your license may also be disqualified, and/or there may be imprisonment charged for up to 3-months.
Is it possible to renew a Third-party car insurance policy online if I had purchased it offline?
Yes, it is possible to do so. You will have to visit www.acko.com for details. However, you can also choose to renew Third-party car insurance online from a different insurer.