Know about Third Party Insurance- Coverage, Exclusions and Rates etc.

One of the most popular words known to many people owning a vehicle is Third party insurance cover. Also known as TP Insurance is a type of insurance which is mandatory to have for each vehicle owner.

For new buyers there could be some doubts regarding the coverage, benefits and exclusions in Third party insurance. This article aims to clear most of your doubts regarding Third Party Insurance cover in the Motor insurance.

1.Introduction to Third Party Insurance:

This legislation was created in the 1930s with a view that the motor vehicle accident victims should not go without compensation owing to the financial capacity of the first party.

Before the introduction of the Compulsory third party insurance in India, the victims of the motor vehicle accidents were dependent on the mercy or claim paying capacity of the first parties.

A person driving a vehicle may or may not be able to pay compensation to the injured third party and this has created a need for the compulsory third party insurance across the World.

As per the motor vehicle act Third Party insurance is also known as Act-only or Liability only insurance and can be given on Standalone basis. The first party in Motor insurance is the Insured (Customer) and the second party is the Insurer (Insurance Company).

According to the Motor vehicles act it is compulsory for every vehicle plying on public roads to have Third party insurance.

2.Coverage:

Third party insurance cover has the following benefits:

1. Third Party Injuries: In case of an accident resulting in the injury of a Third party in Motor insurance, compensation is paid to the Third party by the insurance company on behalf of the insured. For example, your vehicle might accidentally hit someone walking on the road and injure them. Third party car insurance policy covers the cost to treat those injuries.
2. Third Party Death: In an unfortunate accident resulting in the death of someone, compensation is paid to the family of the deceased. For instance, your car might hit someone on the road and injure them fatally resulting in their death. Third party car insurance policy pays the compensation to the family of the kin as awarded by the honorable courts. The maximum amount of compensation to be settled will be decided by the honorable court depending on the earning capacity, age and other factors of the deceased.
3. Third party property: When you damage the property of a third party person due to an accident, then the third party is compensated by the insurance company for the damage suffered by him. The maximum limit of Third party property damaged is Rs.7.5 Lacs.
4. Personal Accident Cover: A third party policy comes with a compulsory personal accident policy for the Owner/Driver of the vehicle. In case of an accident which results in the Death or disability of the owner of the vehicle, compensation amount up to 15 Lacs is paid to the insured or his family.

3.Exclusions:

There are certain exclusions in the Third party policy which are listed below.

1. Damage to your car: Any kind of damage to the insured’s vehicle is not covered under standalone Third party insurance. For availing this coverage you have to purchase a Comprehensive insurance policy. This comprehensive insurance policy has an Own damage section which covers the damage to your vehicle.
2. Violating rules while driving: Any third party insurance policy will not cover the damages or losses occurred as result of direct violation of traffic rules. For example, driving under the influence of alcohol, driving without a valid licence etc is not covered under the Third party insurance.
3. Driving without a valid insurance policy: Your third party car insurance policy in India will not cover the losses or damage to a third party in case of driving without a valid insurance policy. It is of utmost importance to renew the Third party car insurance policy online before the expiry date so as to avoid any breaks in the insurance policy. Car insurance renewal quote should contain only the necessary coverage opted by you. For instance if you select only Third party insurance coverage, the same should reflect in the renewal quote as well in car insurance renewal tips.

4.Third Party Insurance Rates:

The third party premium rates are different for different class of vehicles. The below table illustrates the rates for Third party. Third party premium rates can be calculated using the below table as Third party premium calculator.

Third party car insurance rates are decided by the IRDA and are subject to change each year depending on the previous year loss ratio, premium collected and many other factors.

Table I

Category	Vehicle Type	Existing Rates(Rs)FY 2019-20	Proposed Rates(Rs)FY 2020-21
	Private Cars
	Not exceeding 1000 cc	2,072	2,182
	Exceeding 1000 cc but not exceeding 1500 cc	3,221	3,383
	Exceeding 1500 cc	7,890	7,890
	Two Wheelers
	Not exceeding 75 cc	482	506
	Exceeding 75 cc but not exceeding 150 cc	752	769
	Exceeding 150 cc but not exceeding 350 cc	1,193	1,301
	Exceeding 350 cc	2,323	2,571
A1	Goods Carrying Commercial Vehicles (other than 3 wheelers) - Public
	GVW not exceeding 7500 kgs	15,746	16,092
	Exceeding 7500 kgs but not exceeding 12000 kgs	26,935	28,288
	Exceeding 12000 kgs but not exceeding 20000 kgs	33,418	35,139
	Exceeding 20000 kgs but not exceeding 40000 kgs	43,037	44,342
	Exceeding 40000 kgs	41,561	44,457
A2	Goods Carrying Commercial Vehicles (other than 3 wheelers) - Private
	GVW not exceeding 7500 kgs	8,438	8,607
	Exceeding 7500 kgs but not exceeding 12000 kgs	17,204	17,549
	Exceeding 12000 kgs but not exceeding 20000 kgs	10,876	11,094
	Exceeding 20000 kgs but not exceeding 40000 kgs	17,476	17,827
	Exceeding 40000 kgs	24,825	25,323
A3	Goods Carrying Motorized Three Wheelers and Motorized Pedal Cycles – Public Carriers
	except e-carts	4,092	4,489
A4	Goods Carrying Motorized Three Wheelers and Motorized Pedal Cycles – Private Carriers
	except e-carts	3,914	3,922
B	Trailers
	Agricultural Tractors up to 6 HP	857	918
	Other vehicles including Miscellaneous & Special Type of Vehicles (Class-C),(For each trailer, for more please multiply by no. of trailers)	2,341	2,507

Table II

Category	Vehicle Type	Existing Rates(Rs)		Proposed Rates(Rs)
		FY 2019-20		FY 2020-21
		Basic Rate	Per Licensed Passenger	Basic Rate	Per Licensed Passenger
C1a	Four wheeled vehicles used for carrying passengers for hire or reward with carrying capacity not exceeding 6 passengers
	Not exceeding 1000 cc	5,769	1,110	6,370	1,226
	Exceeding 1000 cc but not exceeding 1500 cc	7,584	934	8,375	1,031
	Exceeding 1500 cc	10,051	1,067	11,099	1,178
C1b	Three wheeled vehicles used for carrying passengers for hire or reward with carrying capacity not exceeding 6 passengers
	except e-rickshaw	2,595	1,241	2,595	1,241
C2	Four or more wheeled vehicles used for carrying passengers with carrying capacity exceeding 6 passengers for hire or reward
	School Bus*	13,874	848	14,338	876
	Other Bus	14,494	886	14,978	916
C3	Motorized three wheeled passenger vehicles used for carrying passengers for hire or reward with carrying capacity exceeding 6 passengers but not exceeding 17 passengers	6,913	1,379	6,913	1,379
C2	Three wheeled passenger vehicles used for carrying passengers for hire or reward with carrying capacity exceeding 17 passengers	15,845	969	15,845	969
C4	Motorized Two wheelers used for carrying passengers for hire or reward
	Not exceeding 75 cc	861	580	861	580
	Exceeding 75 cc but not exceeding 150 cc	861	580	861	580
	Exceeding 150 cc but not exceeding 350 cc	861	580	861	580
	Exceeding 350 cc	2,254	580	2,254	580

*School Buses are those buses which are registered in the name of the School and are used only for transporting students to or from a school or on school related trips

Table III

Category	Vehicle Type	Existing Rates(Rs.)FY 2019-20	Proposed Rates(Rs.)FY 2020-21
D	Special Types of Vehicles
	i) Pedestrian controlled Agricultural Tractors with Horse Power rating not exceeding 6HP, Hearses and Plane Loaders	1,550	1,660
	ii) Other Misc & Spl types of vehicles	6,847	7,332
E	Motor Trade (Road Transit Risks)
	i) Distance not exceeding 2400 kms	1,055	1,141
	ii) Distance exceeding 2400 kms	1,268	1,371
F	Motor Trade (Road Risks) (Excluding Motorized Two Wheelers) – (Named Driver or Trade Certificate)
	1st named driver or certificate	1,345	1,455
	For additional drivers/ certificates up to 5 (per driver/certificate)	651	704
	For additional Drivers/ Certificates exceeding 5 but not exceeding 10 (per driver/ certificate)	419	453
	For additional Drivers/ Certificates exceeding 10 but not exceeding 15 (per driver/ certificate)	363	393
F	Motor Trade (Road Risks) (Excluding Motorized Two Wheelers) – (Named Driver or Trade Certificate)
	1st named driver or certificate	515	515
	For each additional Driver/ Certificate	257	257

Table IV

Category of Vehicle	Existing Rates(Rs.)FY 2019-20	Proposed Rates(Rs.)FY 2020-21
New Private Car – Three year single premium
Not exceeding 1000 cc	5,286	6,079
Exceeding 1000 cc but not exceeding 1500 cc	9,534	10,149
Exceeding 1500 cc	24,305	24,305
New Two Wheeler – Five year single premium
Not exceeding 75 cc	1,045	1,223
Exceeding 75 cc but not exceeding 150 cc	3,285	3,845
Exceeding 150 cc but not exceeding 350 cc	5,453	6,505
Exceeding 350 cc	13,034	13,034

Table V

Rates for Electric vehicles – Non passenger carrying

Category	Vehicle Type	Existing Rates(Rs) FY 2019-20	Proposed Rates(Rs) FY 2020-21
	Private Cars
	Not exceeding 30 KW	1,761	1,855
	Exceeding 30 KW but not exceeding 65 KW	2,738	2,876
	Exceeding 65 KW	6,707	6,707
	Two Wheelers
	Not exceeding 3 KW	410	430
	Exceeding 3 KW but not exceeding 7 KW	639	654
	Exceeding 7 KW but not exceeding 16 KW	1,014	1,106
	Exceeding 16 KW	1,975	2,185
A1	Goods Carrying Commercial Vehicles (other than 3 wheelers) - Public
	GVW not exceeding 7500 kgs	-	13,678
	Exceeding 7500 kgs but not exceeding 12000 kgs	-	24,045
	Exceeding 12000 kgs but not exceeding 20000 kgs	-	29,868
	Exceeding 20000 kgs but not exceeding 40000 kgs	-	37,691
	Exceeding 40000 kgs	-	37,788
A2	Goods Carrying Commercial Vehicles (other than 3 wheelers) - Private
	GVW not exceeding 7500 kgs	-	7,316
	Exceeding 7500 kgs but not exceeding 12000 kgs	-	14,917
	Exceeding 12000 kgs but not exceeding 20000 kgs	-	9,430
	Exceeding 20000 kgs but not exceeding 40000 kgs	-	15,153
	Exceeding 40000 kgs	-	21,525
A2	Goods Carrying Motorized Three Wheelers and Motorized Pedal Cycles – Public Carriers
	e-carts	2,859	3,136
A3	Goods Carrying Motorized Three Wheelers and Motorized Pedal Cycles – Private Carriers
	e-carts	3,204	3,211

Table VI

Long term rates for electric vehicles – Private Cars and Two wheelers:

Category of Vehicle	Existing Rates(Rs.) FY 2019-20	Proposed Rates(Rs.) FY 2020-21
New Private Car – Three year single premium
Not exceeding 30 KW	4,493	5,167
Exceeding 30 KW but not exceeding 65 KW	8,104	8,627
Exceeding 65 KW	20,659	20,659
New Two Wheeler – Five year single premium
Not exceeding 30 KW	888	1,040
Exceeding 3 KW but not exceeding 7 KW	2,792	3,268
Exceeding 7 KW but not exceeding 16 KW	4,635	5,529
Exceeding 16 KW	11,079	11,079

Table VII

Rates for Electric vehicles – Passenger carrying

Vehicle type	KW Segments	Proposed Basic TP premium (Rs.)	Proposed Premium per licensed passenger (Rs.)
C1a (Four wheeled vehicles used for carrying passengers for hire or reward with carrying capacity not exceeding 6 passengers)	Not exceeding 30 KW	5,414	1,042
	Exceeding 30 KW but not exceeding 65 KW	7,119	876
	Exceeding 65 KW	9,434	1,001
C1b (Three wheeled vehicles used for carrying passengers with carrying capacity not exceeding 6 passengers)	e-rickshaw	1,685	806
C2 (Four or more wheeled vehicles used for carrying passengers with carrying capacity exceeding 6 passengers for hire and reward)	School Buses	12,187	745
	Other than School Buses	12,731	779
C3 (Motorised three wheeled passenger vehicles used for carrying passengers for hire or reward with carrying capacity exceeding 6 passengers but not exceeding 17 passengers)	-	5,841	1,165
C2 (Three wheeled vehicles used for carrying passengers for hire and reward with carrying capacity exceeding 17 passengers)	-	13,388	819
C4 (Motorised Two Wheelers used for carrying passengers for hire or reward)	Not exceeding 3 KW	732	493
	Exceeding 3 KW but not exceeding 7 KW	732	493
	Exceeding 7 KW but not exceeding 16 KW	732	493
	Exceeding 16 KW	1,916	493

Table VIII - Quadricycle

Category	Vehicle Type	Existing Rates (Rs.)FY 2019-20		Proposed Rates (Rs.)
		Basic Rate	Per Licensed Passenger	Basic Rate	Per Licensed Passenger
Quadricycle	Private Car	2,072	N/A	2,182	N/A
	Electric private Car(Not exceeding 30 KW)	-	-	1,855	N/A
	Commercial Vehicles not exceeding 500 CC	2,595	1,241	2,595	1,241

Long term rates – Three years single premium:

Category	Vehicle Type	Existing Rates (Rs.)FY 2019-20	Proposed Rates (Rs.)FY 2020-21
Quadricycle	New Private Car	5,286	6,079
	New Electric private Car (Not exceeding 30 KW)	4,493	5,167

Car insurance cost premium can be reduced if your car insurance renewal is done online using the link Car Insurance compared to the offline mode of renewal where the premium would be slightly higher compared to the online premium.