Buying a Third-party Car Insurance? Be aware of these points before finalizing the insurance coverage

Accidents are bound to happen while driving on the road. Protect yourself against claims from other drivers with third-party car insurance. It provides coverage against expenses incurred due to harm caused to another car or driver.

Buying a Third party Car Insurance

What is Third-party coverage in car insurance?

Third-party coverage in car insurance protects the car owner from claims caused due to accidents with an individual or a car. Third-party coverage comes into play when the accident is caused due to the car owner's fault. The other party can file a claim against damages caused due to the accident, which will be covered under the third-party insurance along with the legal fees incurred. 

As per the Indian Motor Vehicles act 1988, it is mandatory for the car owner to purchase a third-party insurance policy. It has been mandated to ensure that any losses caused to another party can be covered without leading to a legal dispute.

Third-party insurance covers the expenses incurred by the other party. Still, an individual can choose to have a personal accident cover along with a third-party insurance policy which can cover any medical expenses caused due to an accident. 

Third-party insurance coverage makes it easier for the car owner to avoid legal complications in case of an accident.

Let us understand Third-party insurance with a simple example.

  • Example: 

The car owner "A", having third-party insurance, is involved in an accident with car owner "B". The accident is due to the mistake of "A", leading to an expense of Rs 50,000 for "B". 

Since the car owner "A" has third-party insurance, the expenses incurred by "B" of Rs 50,000 will be covered by the insurance.

Also Read: Car insurance myths debunked

Coverage provided by Third-party insurance

There are two forms of coverage provided by Third-party car insurance:

  1. Damage to property coverage - In an accident, the other person's vehicle can get damaged. When the person having the Third-party insurance is at fault, all the expenses related to repairs of the other party's vehicle will be covered by the insurance. Property coverage applies to all forms of property, such as buildings, letterboxes, or boundaries. The maximum limit for third-party compensation in case of property damage is Rs 7.5 lakh.]
     
  2. Injury or medical expenses coverage - If an injury is caused to a third party due to the car owner's fault holding Third-party insurance, all medical expenses will be covered by the insurance. If the accident turns into a lawsuit, the insurance will also cover the legal costs of the policy owner. The maximum limit for third-party compensation in case of injury to another party is Rs 7.5 lakh.
     
  3. Coverage against third party death? - In case of death, the insurance has to pay a compensation decided by the court to the family of the third party. It provides financial protection to the insured individual but he/she can still be criminally prosecuted by the court.

Also read: Personal Accident cover in car insurance

Benefits of purchasing a Third-party car insurance

Purchasing Third-party car insurance may take a few bucks out of your pocket, but its benefits outweigh its cost.

The benefits of purchasing Third-party car insurance are:

  1. Compliance with the law - As per the Motor Vehicles Act of 1988, every vehicle must have third-party insurance. Purchasing third-party insurance is necessary to comply with the law. 
     
  2. Low insurance premiums - The insurance premiums for third-party insurance are low compared to the coverage it provides to the car owner. For a car owner with a 1499 CC car, the third-party coverage goes up to 7.5 Lakh rupees for a premium of Rs 3221 per year.
     
  3. Protection against damages and legal issues - Third-party insurance protects the car owner in case of damages and legal issues. It ensures that the car owner does not have to pay out of pocket if an accident occurs due to their fault.
     
  4. Easy to purchase - Purchasing third-party insurance has become easier and faster with the advent of technology. Any individual can purchase third-party insurance sitting comfortably at their home.

Steps to purchase third-party insurance online

The following steps can be used to purchase third-party insurance online:

  1. Visit any car insurance website
  2. Look for the "Get your quote" section to fill in the car's details.
  3. Fill in personal details such as Name and mobile number.
  4. Select the policy you intend to purchase
  5. Make the payment online and receive the policy via email.

Final Words

While a Third party is mandatory, we recommend buying comprehensive car insurance to ensure that the owner is adequately covered to meet expenses due to damages to his car or third party in case of an accident. 

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.

What is Third-party coverage in car insurance?

Third-party coverage in car insurance protects the car owner from claims caused due to accidents with an individual or a car. Third-party coverage comes into play when the accident is caused due to the car owner's fault. The other party can file a claim against damages caused due to the accident, which will be covered under the third-party insurance along with the legal fees incurred. 

As per the Indian Motor Vehicles act 1988, it is mandatory for the car owner to purchase a third-party insurance policy. It has been mandated to ensure that any losses caused to another party can be covered without leading to a legal dispute.

Third-party insurance covers the expenses incurred by the other party. Still, an individual can choose to have a personal accident cover along with a third-party insurance policy which can cover any medical expenses caused due to an accident. 

Third-party insurance coverage makes it easier for the car owner to avoid legal complications in case of an accident.

Let us understand Third-party insurance with a simple example.

  • Example: 

The car owner "A", having third-party insurance, is involved in an accident with car owner "B". The accident is due to the mistake of "A", leading to an expense of Rs 50,000 for "B". 

Since the car owner "A" has third-party insurance, the expenses incurred by "B" of Rs 50,000 will be covered by the insurance.

Also Read: Car insurance myths debunked

Coverage provided by Third-party insurance

There are two forms of coverage provided by Third-party car insurance:

  1. Damage to property coverage - In an accident, the other person's vehicle can get damaged. When the person having the Third-party insurance is at fault, all the expenses related to repairs of the other party's vehicle will be covered by the insurance. Property coverage applies to all forms of property, such as buildings, letterboxes, or boundaries. The maximum limit for third-party compensation in case of property damage is Rs 7.5 lakh.]
     
  2. Injury or medical expenses coverage - If an injury is caused to a third party due to the car owner's fault holding Third-party insurance, all medical expenses will be covered by the insurance. If the accident turns into a lawsuit, the insurance will also cover the legal costs of the policy owner. The maximum limit for third-party compensation in case of injury to another party is Rs 7.5 lakh.
     
  3. Coverage against third party death? - In case of death, the insurance has to pay a compensation decided by the court to the family of the third party. It provides financial protection to the insured individual but he/she can still be criminally prosecuted by the court.

Also read: Personal Accident cover in car insurance

Benefits of purchasing a Third-party car insurance

Purchasing Third-party car insurance may take a few bucks out of your pocket, but its benefits outweigh its cost.

The benefits of purchasing Third-party car insurance are:

  1. Compliance with the law - As per the Motor Vehicles Act of 1988, every vehicle must have third-party insurance. Purchasing third-party insurance is necessary to comply with the law. 
     
  2. Low insurance premiums - The insurance premiums for third-party insurance are low compared to the coverage it provides to the car owner. For a car owner with a 1499 CC car, the third-party coverage goes up to 7.5 Lakh rupees for a premium of Rs 3221 per year.
     
  3. Protection against damages and legal issues - Third-party insurance protects the car owner in case of damages and legal issues. It ensures that the car owner does not have to pay out of pocket if an accident occurs due to their fault.
     
  4. Easy to purchase - Purchasing third-party insurance has become easier and faster with the advent of technology. Any individual can purchase third-party insurance sitting comfortably at their home.

Steps to purchase third-party insurance online

The following steps can be used to purchase third-party insurance online:

  1. Visit any car insurance website
  2. Look for the "Get your quote" section to fill in the car's details.
  3. Fill in personal details such as Name and mobile number.
  4. Select the policy you intend to purchase
  5. Make the payment online and receive the policy via email.

Final Words

While a Third party is mandatory, we recommend buying comprehensive car insurance to ensure that the owner is adequately covered to meet expenses due to damages to his car or third party in case of an accident. 

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.

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