THIRD PARTY CAR INSURANCE

The 3rd 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 diminishes the worries of the car owner in case of financial liability towards the third party in case of an accident. 

According to the Motor Vehicles Act, having four-wheeler third-party insurance is mandatory in India. A vehicle without this type of insurance is considered illegal in the country. You can obtain this type of coverage policy by visiting the insurer directly, or you can avoid hassle and save your time by buying a 3rd party car insurance online within minutes. 

Third-party Car Insurance Cost

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

Above 1500cc

INR 7, 890

What all does a 3rd party car insurance cover?

Now that we know one cannot drive a vehicle on the road without a 3rd party motor insurance, let's get to know what type of coverage it gives to the insurer. 

Death: If your vehicle is involved in an accident that leads to the death of a third party, then you would be held liable for the unfortunate loss. As far as the financial liability is concerned, your insurer will get it covered. The exact amount of compensation would be determined by the tribunal as per the earning capacity of the person who passed away.  

Partial and Permanent Disability: If a third party involved in the accident faces disabilities like fractures, bone displacement, then the third-party car insurance company shall bear all the medical bills. In the case of permanent disability of the person, your insurer will assure the person a pre-assured sum. 

Bodily Injuries:  Injuries sustained during an accident can be anywhere. The best third-party car insurance companies understand this and compensate for all the medical bills that are generated owing to the accident, thus reducing financial liability for you. 

Property Damage: If you were involved in an accident that has caused severe damage to property, you could rest assured regarding the financial trouble that might have come your way, as your insurer has got your back in this matter. In such situations, you can come out of complications due to your vehicle's third-party car insurance.  

Type of Damage

Compensation

Loss of Life

Unlimited

Loss of Limb/ permanent disability

Unlimited

Injury

Limited to medical expenses

Property Damage

Up to INR  7,50,000

What does third-party car insurance NOT cover? 

A 3rd party car insurance will certainly help you with monetary liability concerned with third parties if your car is involved in an unfortunate incident. However, there are certain limitations to this type of policy. 

  • If you were driving your care outside the stipulated geographical location mentioned in the policy. 
  • The third-party insurance will not give you coverage if your car gets into an accident on account of drunk driving. 
  • Its owner or the designated driver was not driving the motor vehicle. 
  • If any radioactive reaction causes the loss of life or property of a person. 
  • If the loss is caused by war or public invasion. 
  • Any damages that are sustained by the vehicle of the insurance holder's owner. 

Third-Party Car Insurance Claim Settlement: How Does it Work? 

You might be wondering, 'how does the third-party car insurance work?'. Given the fact that we are talking about the loss of life, limb, and property, it is not uncommon for you to think that the process would be hefty. Let us find out. 

-First, the victim or the family member of the victim will have to take up the matter with the third-party car insurer. 

- The next step is to lodge a complaint regarding the damage and file an FIR. 

- Once the FIR has been filed, you can take up the case with the tribunal and wait for the verdict. 

- The insurance company will act according to the verdict of the court and sanction the settlement amount within the stipulated time period. 

In the accident, if there is a loss of life or a loss of limb, then there is no capping on compensation. In case there is a loss of property, then the IRDAI has capped the maximum compensation the insurance company will bear is 7.5 lacs. 

Advantages of a Third-Party Car Insurance

  • It gets you out of financial liability in case of an accident
  • This insurance allows you to drive legally in the country
  • Ensures that you will not have to bear a monetary burden in case of damage to any third party due to an accident
  • Getting a 3rd party vehicle insurance is easy and consumes less time if you do it online. 
  • The insurer bears the entire amount in case the third party has a physical loss. 

FAQs

Q1: 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. 

Q2: 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. 

Q3: 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 

 

Q4: 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. 

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