If you are a car owner in India, you are required to have at least third party car insurance as per the Motor Vehicles Act, of 1988. This type of four wheeler insurance covers the cost of damages you have caused to another person or property in case of an accident. However, it does not cover the cost of damages to yourself or your car.
Third party car insurance is different from comprehensive motor insurance. A comprehensive plan covers both third-party liabilities and damages to yourself. However, the more coverage a motor insurance policy offers, the more expensive it is. Thus, a comprehensive car insurance policy is costlier than third-party car insurance.
So, why is third party car insurance important? It is important because it protects you from financial and legal liabilities arising from accidents you and your vehicle are involved in.
Features of Third-Party Car Insurance
Listed below are the primary features of third party car insurance
- Third party car insurance is also referred to as an act-only or liability-only policy.
- Third party car insurance premiums are fixed by the Insurance Regulatory and Development Authority of India (IRDAI) depending on your vehicle’s engine capacity. The premium amount is fixed across all insurance companies.
- Third party car insurance is mandatory. If you are caught with valid insurance, you might face legal complications. It can include fines, penalties, or even imprisonment in some cases.
- Third-party four wheeler insurance does not offer protection to the insured and their vehicle itself.
How Does Third-Party Car Insurance Work?
The primary objective of getting third-party motor insurance is to ensure legal and financial assistance in the event you and your vehicle are involved in an accident.
Suppose you are driving your car and you accidentally a pedestrian walking down the road. The pedestrian is severely injured. In this case, you are liable to cover the medical expenses of the pedestrian, a third party. With third party car insurance, your insurance company will compensate the third party for their medical expenses up to the limit mentioned in your insurance policy.
Third party car insurance also covers the damages caused by your car to another person’s property, such as a vehicle, a house, a shop, etc.
Note that third party car insurance does not cover the damages caused by your car to yourself or your property. For example, if you are driving your car and you hit a tree and damage your car, or if you get injured in the accident, third party car insurance will not pay for these expenses. You will have to cover them yourself or buy comprehensive motor insurance that covers both third-party and own damage liabilities.
Benefits of Third-Party Car Insurance
Here are the primary benefits of getting third party car insurance:
Protection against legal disputes is one of the major benefits of third party car insurance. It will cover legal expenses the court may award to the third party for their injuries, death, or property damage when you are involved in an accident. Moreover, it helps you avoid legal penalties and hassles for not complying with the law.
Medical bills can be expensive. Imagine getting involved in a car accident and having to cover someone’s medical expenses! It can break your bank. That is where third party car insurance comes in! Third-party car insurance offers financial assistance arising from an accident to cover third-party liabilities. If you have third-party motor insurance, the insurance company will cover medical expenses, funeral costs, and property damages up to the maximum limit specified in your policy. It’s a great way to avoid spending money from your pocket in case of an accident.
Peace of mind
With third-party insurance comes peace of mind. You don’t have to worry about the legal consequences and draining your finances in case you are involved in an accident. A liability cover policy ensures you are not held liable for third-party claims and lawsuits. It also ensures that you are adequately covered for unfortunate events. Apart from ensuring that you are complying with the law, it also helps you avoid fines and penalties for driving without four-wheeler insurance.
Quick and easy to obtain
Obtaining third party car insurance is no hassle. It is super quick and easy. It does not require extensive verification or documentation. You can buy third-party insurance online or offline from any general insurance company you prefer. Moreover, you don’t have to spend much time on the inspection and valuation of your vehicle since third-party car insurance does not depend on your car’s make, model, age, condition, etc.
Lastly, third party car insurance is cost-effective. Since the premiums are fixed by the IRDAI based on your car’s engine capacity, you can buy it at nominal premium rates. The premium amount will remain the same regardless of your location, driving history, age, car type, model, etc. The premium amount will also remain unchanged even though you file a claim under the motor insurance policy.
Apart from the several benefits third party car insurance offers, it is also mandatory for every car owner in India. It protects you from the financial and legal liabilities of an accident involving your car and a third-party person or property. It covers the costs of medical expenses, death, disability, or damage of the third party, up to a limit mentioned in your car insurance policy. There are no reasons strong enough to compel you not to buy third-party car insurance. Plus, you might end up paying a hefty fine or penalty if you do not comply with the law.
Moreover, third party car insurance comes with affordable premiums, and you can easily buy it online or offline. It not only gives peace of mind to the insured but also ensures social responsibility towards the third party.