Third Party Insurance
Accidents are unplanned and it can be due to luck, fate, or poor road conditions in India. There are chances of major injuries or property damage in a car accident. But you can be thankful if you already have a third party car insurance as a savior in such unfortunate situations.
We bring to you all there is to know about third party car insurance and how it can offer a great insurance coverage for your car.
About Third Party Insurance
A third party insurance for car is a cover to protect you from any major liability occurred during your own car accident, such as injuries or damage to third party property. Your insurance company will compensate you for repair and hospitalization costs of third party. Hence, you can get a financial cushion for repair work on the third party car.
Importance of third party car insurance policy
According to the Motors vehicle Act, 1988, each car owner in India ought to invest in third-party insurance for automobile coverage. When compared against a comprehensive plan, a third-party vehicle insurance coverage presents the basic coverage required and is more affordable. Thus, having your car/automobile insured through third-party insurance guarantees that you have basic insurance coverage for your car. Furthermore, third-party insurance coverage protects you financially from any third-party liabilities, lack of property, death, or physical harm.
A third party insurance is termed as an ‘act only’ cover support. 3rd party insurance means a bare minimum insurance coverage your car needs to have in order to ply on India’s roads. Not having even this bare minimum insurance will make you eligible for hefty fines if caught by a traffic policeman. Additionally, the loss to the third party becomes a personal liability to you if you have not taken insurance for your vehicle, thus making you pay out of your pocket.
What is third party car insurance?
Third-party insurance for a car is a cover to protect you from any major liability occurring during your own car accident, such as injuries or damage to third party property. Your insurance company will compensate you for the repair and hospitalization costs of a third party. Hence, you can get a financial cushion for repair work on the third party car.
How does third party car insurance work?
When you have invested in a 3rd party car insurance policy for your car, you are secured against third party liabilities that you might face if your car is responsible for third-party financial losses. If your car causes third party death, physical injury or property damage and your car are found to be responsible for such contingencies, you would incur a legal liability against the third party. You would have to pay the financial damages suffered by the third party. The third-party vehicle insurance policy covers these financial liabilities that you face. The policy would pay for the financial damages that the third party has suffered due to your insured car.
Features of third party car insurance
Here are some of the salient features of a 3rd party car insurance cover that you should know about –
- In the case of new cars, the cover should be taken for a long term period of 3 years. For older cars, however, coverage is available on an annual basis.
- The premium of 3rd party car insurance is determined and reviewed by the Insurance Regulatory and Development Authority of India. The premium can change every financial year.
- The car third party insurance price depends on the engine capacity of the car.
- You can opt for a personal accident cover for the driver/owner of the car with the mandatory third party cover.
- In the case of third party claims, you would have to file a police FIR.
Why do you need four-wheeler third party insurance?
If you own a car, you would need a four-wheeler third party insurance policy to drive the car in India. It is simply because of the fact that the policy has been made mandatory under the Motor Vehicles Act, 1988. As per the Act, every car has to necessarily carry a valid four wheeler third party insurance cover to legally run on Indian roads. If you are found without a valid third party cover, you would face legal consequences. So, for complying with the basic legal mandate, you need a 3rd party car insurance policy.
Benefits and importance of third party car insurance plans
Here are some of the key benefits and importance of third party car insurance plans that make them a must-buy –
- Freedom from legal fines and penalties
The main benefit of having third party coverage is an escape from legal fines and penalties. If you are caught driving without third party coverage, you are liable to pay hefty fines. Moreover, in the case of serious accidents, lack of coverage might also lead to imprisonment or other legal consequences. So, a third party cover is recommended to avoid such legal hassles.
- Financial compensation
The third-party car insurance coverage shoulders the financial burden that you might incur in case of third party losses. As such, it provides you with financial security and saves your finances from being threatened by unforeseen emergencies.
- Cost-effective
The car third party insurance price is low and affordable. As such, it is quite cost-effective compared to the coverage that it offers.
- Ease of purchase
You can invest in a suitable policy of third party car insurance online. The process is easy and convenient. Moreover, third party car insurance online offers instantaneous coverage.
- Good scope of coverage
Third-party bodily injuries and deaths are covered without any upper limit. The financial liability decided by the motor accidents claims tribunal is paid by the third party policy. As such, you can avail of unlimited coverage for third party bodily injuries. In the case of property damage, however, coverage is allowed for up to INR 7.5 lakhs which is a considerable amount.
Third-party policy for commercial vehicles
Even commercial vehicles in India are required to be insured under a third party plan. Thus, you can find third party policies for commercial vehicles too. Such policies are also offered by insurance companies where the premiums are different from the car third party insurance price. All types of commercial vehicles can be covered under a third party policy.
What does Third Party Insurance Include?
A third party insurance provides the below coverage and includes:
- Third Party Liability
The Liability covers in case of injury or death to the Third Party and it is unlimited. In case if the third party has lost his/her life, then the insurance provider will bear the compensation. Based on the FIR and case registered with Motor Accidents Claims Tribunal, the compensation amount is determined. This doesn’t depend on the deceased’s income but more on how much it has affected his/her family because of the loss. In case of a private car, the insurance cover for legal liability of the paid driver depends on the Workmen’s Compensation Act 1923. Similarly, a coverage for unnamed passengers can also be taken with a nominal additional premium of Rs. 50/person for a sum insured of Rs. 1 lakh up to a maximum of Rs. 2 lakhs.
- Property loss
During an accident whatever property damage occurs, the compensation can be claimed for property damage through the third party insurance cover. According to IRDA norms, the damage covers up to Rs 7.5 lakhs. The lower the coverage, the lesser will be the premium.
- Personal Accident support for Owner
In an accident, in case of death or injury to the owner-driver of the vehicle, then the third party insurance can compensate for this death/injury up to maximum of Rs. 2 lakhs. The compensation limit is given below:
- If the nature of injury is death, then the compensation is 100%.
- If the nature of injury is loss of eyesight or two limbs, then the compensation is 100%.
- If the injury is loss of 1 limb or 1 eye, then the compensation is 50%.
- If the injury makes the person completely disabled in other parts of the body, then the compensation is 100%.
Note: This coverage is subject to the below conditions being met:
- The driver-owner is the actual registered owner of the vehicle.
- The policy is named for driver-owner of the vehicle.
- The driver of the vehicle has an effective license according to the provisions of rule 3 of the Central Motor Vehicles Rules 1989, during the accident.
What does it not cover?
There are a few exclusions that are to be understood under the third party car insurance.
- If the driver of the vehicle is the not the owner of the car, then it is not included on the cover.
- Any sort of direct or indirect occurrence due to radioactive contamination or nuclear weapons is not covered.
- Damage or loss or liability caused by war, invasion, etc. is not included.
- Any accident or loss which is not in the specified geographical boundary won’t be covered.
- Claims arising out of contractual liability.
The above-mentioned features are common exclusions. For more information, you can refer your car insurance documents.
Third-party premiums
As stated earlier, the car third party insurance price is fixed by the IRDAI. For the financial year 2021-21, IRDAI has proposed third party premium rates for cars. Here are the proposed rates for private cars in India
The engine capacity of the car | Proposed third-party premiums for FY 2020-21 |
Up to 1000 cc | INR 2182 |
More than 1000 cc but below 1500 cc | INR 3383 |
More than 1500 cc | INR 7890 |
In the case of electric vehicles, both private and commercial, IRDAI has proposed a discount of 15% on third party premiums. For hybrid vehicles, on the other hand, a discount of 7.5% has been proposed.
Add-ons under third party car insurance
Though the third party car insurance policy provides the basic mandatory cover, it also offers you the option of customizing your policy with a few add-ons. The add-ons that are available with 3rd party car insurance plans include the following –
- Add-on for personal accident cover for owner/driver for a value of INR 15 lakhs
- Add-on for personal accident cover for co-passengers for a value of INR 2 lakhs
- Add-on for personal accident cover for paid or hired driver of the car
Third-party v/s comprehensive car insurance plans
Besides third party coverage, car insurance plans are also offered as comprehensive plans. Comprehensive plans are those that cover third party liabilities as well as damages suffered by your own car.
Here are the major differences between the third party and comprehensive car insurance plans –
Points of difference | Third-party car insurance | Comprehensive car insurance |
Coverage | Third-party plans cover only third party legal liabilities. They do not cover any damages suffered by your own car | Comprehensive plans cover both third party liabilities as well as the damages that your car suffers, including theft |
Mandate | These plans are mandatory | These plans are not mandatory |
Premium | Premium is fixed by IRDAI. It is fixed for all companies and is low | Premium is fixed by respective insurance companies. It, thus, varies across companies and is higher than third party premiums |
Add-ons | One or two add-ons are available | A range of add-ons are available |
Premium discounts | Not available | A range of discounts are available including no claim discount |
Drawbacks of third party car insurance
Though a third party car insurance policy provides the mandatory cover, it is better to opt for a comprehensive car insurance plan. This is simply because of the fact that third party plans do not cover the damages that your car suffers. So, if in an accident, your car also suffers considerable damages or if your car is stolen, the financial loss that you suffer would not be covered by the 3rd party car insurance policy. You would have to shoulder the financial costs yourself. Since such costs can be considerable, comprehensive coverage is recommended if you use your car frequently.
Points to keep In mind while raising a third party car insurance claim
Unless you are aware of the basics, raising insurance claims can be a stressful process. However, if you stay informed about the details of the process, you will be able to handle any issues that may arise. The points to keep in mind while raising a third party car insurance claim are-
- Lodge an FIR report in case of an accident, along with which you will also need to inform the insurance company. Without these two steps, a claim settlement process won’t initiate.
- The third-party needs to provide valid proof to prove the mistake of the other party.
- It is advised to settle small losses and minor damages outside court, otherwise, it takes up a lot of time in proceedings.
- There is no set limit on the coverage of personal damage faced by the third party, while for property damages, the maximum coverage is INR 7.5 lakhs.
When is third party car insurance better than comprehensive coverage?
Third party coverage offers only partial coverage for repairs and hospitalization (with coverage for only third party and nothing for self). On the other hand, comprehensive coverage offers protection for both third party and for self. Hence, you may be wondering when third party insurance will be a better choice than comprehensive coverage. Here are some reasons when a third party insurance will be a good choice:
- When the vehicle value is very low
- When you don’t need coverage for damage to own car or own bodily injury.
- When you can bear costs for your own car damage without the need for any coverage
- In cases where there is a hypothecation, the financer mentions in the agreement that till the time the loan is not repaid, the customer cannot go for a TP only policy. Thus it becomes compulsory to take a comprehensive policy. We strongly recommend extending third party coverage to be a comprehensive coverage so that you can get total value for money on the premium you pay.
How to make third party car insurance claims
To make a claim in your 3rd party car insurance policy, you would have to follow specific steps. These steps are given below –
- Informing the insurer
The first step is to immediately inform your insurance company whenever you suffer a third party claim. This helps you to avail of claim assistance services from the insurer. Moreover, your claim is also registered with the company and you get a claim reference number for tracking your claim status.
- Filing a police FIR
Then, you should file an FIR with the police authorities of the area where the claim has occurred. A police FIR is a mandatory document for third party claims.
- Claim handled by the motor accidents tribunal
Third-party claims are transferred to the motor accidents claim tribunal that assesses the claim and then passes a judgement regarding the financial liability that you face. It might take time for the tribunal to pass its judgement and your claim would be settled only after the tribunal’s proceedings are done.
- Claim settlement by the insurer
Once the tribunal passes its judgement, you would have to inform the insurance company of the same. The insurance company would, then, pay the claim directly to the third party. You would also have to fill up and submit a claim form along with various documents that include the following –
- Policy bond
- Driving license
- Identity proof
- Ruling by the tribunal mentioned on a court document
- Medical bills and reports, in original, in the case of third party injuries
- Any other document as needed by the insurer
Once all the steps are followed, the third-party claim would be settled and closed.
You can also take Turtlemint’s assistance for third party car insurance claims. Just visit https://www.turtlemint.com/raise-claim/ and click on ‘Raise a Claim’. Choose the type of policy under which you want to raise your claim, the name of the insurance company, policy number, your mobile number, and the details of the claims. Submit these details and Turtlemint’s claim department would help you get your claim settled within the shortest possible time.
How to buy third-party car insurance online?
- Visit the website of Turtlemint.
- Go to the website and click on ‘Find Car Insurance Plans’. Then enter the car registration number or click on ‘I don’t have a registration number’, after which you’ll be prompted to enter your registration area.
- Then fill in your personal information. Complete the remaining fields on the website as directed.
- Several plans will pop up on your screen. Choose the plan most suitable for you and pay the premium. All major credit/debit cards, as well as net banking, are accepted for payment.
- Then you will receive a soft copy of your third-party car insurance policy through email almost immediately. You may either print and file this or simply access it through your email at any time
Why choose Turtlemint?
It is important that you should know the basics of car insurance and the things to remember before you purchase one. You need to have all the necessary information and third party car insurance rates from different providers in order to make a decision of picking one company from the many options. For this you need not spend a lot of time and effort walking up to the office of each and every insurance company. You can eliminate these troubles and get quotes from multiple insurance companies from the comforts of your home or office.
How? It’s simple, just log on to Turtlemint and do a detailed third party car insurance price comparison of the different quotes available from different providers. If you have any query at any point in time during the comparison or buying process, we have a team of professional advisors who can assist you with any doubts or clarifications you may need to make during the purchase process.
Check out why opting for Turtlemint’s third party car insurance online makes total sense:
- You can get smart tips on saving money without any compromise on your cover.
- It is completely easy to make an online purchase with secure payment.
- You are offered with the best price on insurance with a holistic view.
- It gives 100% claim assistance.
- You can place your requirements and we recommend you with the best plan matching your needs.
FAQ’s
Yes, according to Motor vehicles Act 1988, India, it is mandatory to have a Third Party Insurance. It is illegal to drive a car on Indian roads without a policy.
The IRDAI revises premium every year, considering the ratio of claims made and loss for providers. Because of this, third party insurance rates for cars and bikes have become costly from April 1st, with the insurance rate rising up to 40%.
Here are the third party car insurance price 2017
- The premium for small cars (up to 1000 cc) is currently Rs 2055. This denotes that the third party car insurance rates have increased by 39.9%.
- The hike for medium size cars (1000 – 1500 cc) is about 40%, and is currently Rs. 2863.
- In the case of bigger cars like SUVs (1500 cc+) the premium is hiked by 25%, to Rs. 7890 presently.
The comprehensive insurance policy has two components, own damage and the third party damage. But in case of third party insurance, only third party damage is factored in for claims.
The simple answer is, you should report the accident as soon as possible. In many cases insurance companies have 24-hour accident claim on mobile apps and hotlines.
Many insurance companies need policyholders to make claims within the specific time window of the accident occurring. But these limits are specific to each policy. If you are unsure about what is the appropriate time period within which you have to make a claim, then you can ask your insurance agent.
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