If you’re new to the motor insurance world, wrapping your head around the complexities of different policies can be daunting. One term that often pops up is third party insurance. In this article, we’ll break down this concept, shedding light on what it entails and how it can provide assistance when you need it the most.
What is Third Party Insurance?
Third party insurance is a type of motor insurance designed to safeguard the vehicle owner from unexpected liabilities arising from accidents. A third-party liability policy will cover you against personal injuries to a third party and property damages to a third party up to Rs. 7.5 lakhs.
Understanding the Three Parties
To comprehend third party insurance, we need to grasp the three key players in a car insurance policy:
1. First Party: This is you, the car owner who purchases the insurance.
2. Second Party: The motor insurance company that promises financial aid in exchange for a premium.
3. Third Party: Anyone else who might get injured or have their property damaged due to an accident involving your car.
The Legal Contract
Think of third party car insurance as a legal agreement between you (the first party) and the insurance company (the second party). The insurer commits to covering any legal liabilities you might face if your car causes harm to a third party. This coverage is a fundamental aspect of every car insurance policy.
Why is Third Party Insurance Mandatory?
The rising number of car accidents has led to the mandatory requirement for third party car insurance. Many accidents involve third parties who suffer losses through no fault of their own. The compensation amounts can be substantial, and not every car owner can afford such expenses. Third party insurance steps in to ensure that victims receive compensation without bankrupting the responsible party.
Vehicle insurance is a mandatory requirement as per The Motor Vehicles Act, 1988. Non-compliance can lead to monetary penalties and legal issues. Thus, make sure to buy vehicle insurance and keep the policy active by renewing it before its expiry date. You can buy/renew vehicle insurance easily, quickly, and conveniently via the ACKO website/app for a hassle-free insurance experience.
Third Party Insurance Premium Rates (2023)
The third party car insurance premium is determined by the Insurance Regulatory and Development Authority of India (IRDAI), considering the car’s engine Cubic Capacity (cc). Hence, the premiums are low and remain constant across all third party policies.
Engine Capacity Premium Rate
Not more than 1,000 cc Rs. 2,094
Over 1,000 cc but not more than 1,500 cc Rs. 3,416
Over 1,500 cc Rs. 7,897
Coverage Under Third Party Insurance
Now, let’s dive into what third party car insurance actually covers:
1. Third Party Bodily Injuries: If someone gets injured in an accident caused by your car, the insurance covers their medical expenses, including compensation to the victim’s family in case of death or disability.
2. Third Party Vehicle Damage: If your car collides with another vehicle, the insurance pays for the repair costs of the damaged third party vehicle.
3. Third Party Property Damages: In case your car damages someone else’s property, like a boundary wall, the insurance covers the cost of repair.
4. Personal Accident Cover to the Owner-Driver: Some insurers offer personal accident cover to the car owner-driver, providing compensation in case of accidental death or disability. However, this is not universal and varies among providers. The PA cover is mandatory by law, providing a coverage of up to Rs 15 lakhs. It must be bought separately from ACKO.
How Does Third Party Insurance Work
The purpose of third party car insurance is to alleviate the financial burden on you when your car is involved in an accident. Here’s how it typically works:
1. Inform Your Insurer: As soon as an accident occurs, inform your insurance company. The quicker you report, the faster you can receive financial assistance.
2. Raise a Third Party Claim: After reporting, you’ll need to raise a third party claim with your insurer.
3. Assessment: The insurer may send a surveyor to assess the injuries or property damages caused to the third party.
4. Claim Approval: Once approved, the insurer covers the liabilities or compensates the third party on your behalf, sparing you from immediate financial strain.
For example, imagine you swerve to avoid hitting a dog, unintentionally colliding with the car next to you. The owner of the damaged car is the third party. With third party insurance, your insurer covers the repair costs for the damaged vehicle, easing your financial responsibility.
Benefits of Third Party Insurance
Here are some key advantages of opting for third party car insurance:
1. Accidental Legal Liabilities Coverage: This covers your legal liabilities arising from damaging third party property or vehicles or causing injuries or death.
2. More Pocket-Friendly: Third party insurance is more affordable than comprehensive plans, making it a cost-effective option.
3. Ensures Peace of Mind: By covering your accidental legal liabilities, it lets you enjoy driving without the constant worry of unforeseen financial burdens.
In a Nutshell
Third party insurance is like a financial safety net, providing assistance when your car inadvertently causes harm to others or their property. It’s a crucial aspect of responsible car ownership, ensuring that you can navigate the roads with peace of mind.
Understanding third party car insurance is essential for every car owner. It not only complies with legal requirements but also serves as a reliable support system in times of unforeseen accidents. So, whether you’re buying new insurance coverage or exercising insurance renewal, third party insurance is a prudent choice for a hassle-free and financially secure driving experience.
Visit ACKO to kick-start your journey towards comprehensive protection for your car today!
Frequently Asked Questions (FAQs)
Q. What long is a third party car insurance policy valid for?
A. Typically, third party policies are valid for one year. Yet, it’s mandatory to purchase a three year third party policy when insuring a new car, as per legal requirements.
Q. Can you add roadside assistance to a third party car insurance policy?
A. No, it’s not possible to add this cover. Add-ons, including Roadside Assistance, are exclusive to comprehensive policies, not available for third party coverage.
Q. What should I do if there’s an error in my third party car insurance document?
A. For typos or minor details like address changes, promptly address them through an endorsement process with your insurer. Major changes, such as engine modifications, are possible but may impact the premium.
Q. Is there a deadline for filing a claim?
A. A third party claim should be submitted within 60 days of the accident, but it’s advisable to do so promptly.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.