What is Third-Party Car Insurance And How it Works
In a country like India, where the use of motor vehicles is increasing day by day, the number of accidents happening has also gone up, and the fatality rate on account of accidents is also rising.
What is a third party car insurance?
In most simple words, if your vehicle meets with an accident and you need to pay the cost of repairs of the other party’s vehicle and medical expenses of the injured, then this amount shall be paid by the third party insurance company.
Types of Car Insurance
From the various types of car insurance, we now know about what is a third party car insurance but who is the third party is also a question commonly asked. So for that, we need to understand the terminologies of third party car insurance.
First Party: The person who purchases the policy is called the first party. He is the person who owns the vehicle.
Second Party: The person who makes suitable the financial loss suffered is called the second party. In our case, it will be the insurance company.
Third-Party: The person to whom damage is caused is called a third party. He raises the claim for damage caused by the first party.
Is A Third Party Vehicle Insurance Policy Worth It
Third-party motor insurance is a major need in India under the provision of the Motor Vehicle Act, 1988. As the name says the main benefit of the policy is the ‘third party’. Third-party here means someone who is other than the policyholder and the insurance company- be it a person traveling in another vehicle or pedestrian. A third-party insurance policy generally covers your legal liability for the damages caused to the third party by you by utilizing your car. It covers bodily injury or death to a third party and damages to third party belongings.
How Does The Third-Party Vehicle Insurance Work?
Firstly, you will have to inform the insurance company about any damage. This may be done by contacting the customer care number. In most cases, the insurance company arranges for the vehicle to be towed to the nearest garage. While claiming, you will have to give the listed documents:
Duly signed claim form
First information report (FIR) copy
Policy document
Copy of the driving license
Copy of the registration certificate (RC)
Understanding third party car insurance
Third party car insurance is mandatory under the Motor Vehicles Act, 1988. This government-mandatory requirement ensures that policyholders will be compensated with an agreed amount to cover their financial loss or damage in the event of an accident. This insurance type also covers any legal liabilities from the accident causing third party bodily or property damage.
How to claim third party insurance for a car?
Evaluating how to claim 3rd party insurance is a significant task to ensure a smooth and hassle-free experience in case of accidents. Opting for an insurer known for prompt and fair claim settlement process is necessary. This helps you avoid unnecessary delays or disputes regarding claims.
Following are some primary 3rd party car insurance claims that you make in case of an accident:
- Medical expenses claim if any bodily injuries or property damage occurs, including treatment expenses and hospitalisation bills.
- A compensation claim for physical disability to a third party.
- A compensation claim for the money paid to dependents of third parties in case of death due to an accident.
- The compensation ceiling price capped by IRDA is at RS. 7.5 lakhs. If the claim exceeds this ceiling, the car owner must pay the balance amount.
What Is Third-Party Liability Car Insurance?
Third-party liability insurance means coverage against legal liabilities that may arise due to an accident caused by your car that leads to third-party losses.
The term ‘third party’ refers to someone other than the two parties involved in the insurance contract, i.e. you (the policyholder) and your insurance provider.
Key Features of Third-Party Liability Car Insurance
You just know the third-party liability insurance, meaning let’s move on to the key features of it.
· It is mandatory by law for all vehicles.
· New cars must be taken for three years at the time of purchase. For old cars, it can be taken annually.
· IRDAI fixes premium rates and is the same across insurers.
· The premium depends on the car’s cubic capacity and usage type (private or commercial).
· Discounts are available for vintage and hybrid cars.
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