It is mandatory for every vehicle owner in India to have at least a 3rd party car insurance. A third party car insurance policy provides the most basic coverage and is more affordable as compared to a comprehensive plan. Thus, besides being a mandatory requirement it is also essential to have your vehicle/car insured by at least a 3rd party only cover so that you have a minimum of basic insurance coverage for your car.
Third-party car insurance offers cover against any legal liability to a third party caused when you are at fault. It covers any damage or injury caused by the insured, to another person or property. A third-party liability cover is made mandatory in India under the Motor Vehicles Act, 1988. Third-party car insurance is the minimum legal level of cover needed to drive a car. It covers you if you damage someone else’s property or injure them while driving, and will cover your passengers too. Insurance is a contract whereby one party, the insurer, undertakes in return for a consideration, the premium, to pay the other, the insured or assured, a sum of money in the event of the happening of a, or one of various, specified uncertain events. Insurance developed from the fourteenth century as a means of spreading huge risks attendant on early maritime enterprises; life and fire insurance developed later. The main classes of insurance are life and other personal insurance, marine insurance, accident or property insurance and liability insurance when the sum becomes payable when legal liability is incurred as for personal injuries or professional negligence to another.
What is Third-Party Insurance?
There are two quite different kinds of insurance involved in the damages system. One is Third Party liability insurance, which is just called liability insurance by insurance companies and the other one is first party insurance. A third party insurance policy is a policy under which the insurance company agrees to indemnify the insured person, if he is sued or held legally liable for injuries or damage done to a third party. The insured is one party, the insurance company is the second party, and the person you (the insured) injure who claims damages against you is the third party. Third-party insurance is a car insurance coverage which insures you against all the 3rd party legal liabilities which may arise due to any mishap such as a road accident involving your car. It provides coverage for bodily injury/death of a third party (as decided by a court of law) as well as third party property damage up to Rs. 7.5 lakh.
How Does Third Party Insurance Work?
If a policyholder holding third party car insurance gets involved in an accident, then the insurance company is liable to provide him with financial assistance for his liabilities towards a third party for their injuries, death and property damage. This insurance cover lessens the financial burden of the policyholder for any damage sustained by a third party with the insured car. In case of an accident, the insured person should intimate the insurer immediately about the mishap before raising a claim. After the claim is raised, the insurance company appoints a surveyor to examine the extent of damages and verify the estimated repair cost. After the verification process, the insurance company pays off the amount of the claim.
Importance of Third Party Car Insurance Policy
Why do you need third party insurance for a car? As per the Motors Tariff Act 2002, it is mandatory for every vehicle owner in India to have at least a 3rd party car insurance. A third party car insurance policy provides the most basic coverage and is more affordable as compared to a comprehensive plan. Thus, besides being a mandatory requirement it is also essential to have your vehicle/car insured by at least a 3rd party only cover so that you have a minimum of basic insurance coverage for your car.
What All Is Covered Under A Third-Party Insurance Cover?
• Third Party Property Damage: All third party property damage are covered under the third party only cover up to Rs.7.5 lakh.
• Third Party Death/Bodily Injury: Under a third-party plan, the insurer provides 100% compensation in case of death of a third party and 50% indemnification in case of partial blindness or loss of a limb. The compensation amount for third party liabilities is decided by a court of law.
What Is Not Covered Under Third Party Car Insurance?
A third-party car insurance policy does not provide coverage for own-damage sustained by a vehicle or its driver/owner. To get insurance for the own-damage of your car, you can purchase a comprehensive car insurance policy or a standalone own-damage car insurance policy. Also, to insure yourself or the driver of your car you need to opt for a personal accident cover or paid driver cover, as the case may be.
What are the Benefits of Buy/Renew Third Party Four Wheeler Insurance?
The following are the benefits of purchasing third party four wheeler insurance:
• It is Compulsory: Third-party 4 wheeler insurance is compulsory and if caught without one you can be punished, hence, having one ensures you abide by the law.
• Peace of Mind: In case of a mishap there can be immense financial pressure on people. If a third party is involved it becomes even more cumbersome. With third party insurance, you can be assured these liabilities will be covered.
• Low Premium Amount: The third party insurance is available at very low and affordable prices and proves to be extremely useful in times of crisis.
How to Claim Third Party Car Insurance?
To get compensation for the mishap from the insurance provider the policyholder must follow the following steps:
• The policyholder must inform the insurance company about the incident and before the stipulated time mentioned. If claims are made after this time the insurance company can reject it.
• An FIR must be filed by the insurance holder reporting the incident at the closest police station and a copy of the same must be submitted to the insurance company at the time of filing the claim or during the process.
• The insurance holder must follow the due process and submit the required documents for completing the claim process.
• The insurance company will send a surveyor to check and assess the damage. After this, a report will be filed.
• The claim will be completed based on this report.