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All You Need to Know About Third Party Car Insurance

Not sure what all is linked to third-party liability insurance? Here’s a quick ‘dekho’ of third-party insurance that says it all.

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What is Third-Party Insurance?

It protects yourself from any legal liability due to the involvement of your own car in an accident. Be it death, disability, injury or sizeable property damage to a third party, your insurer compensates for it. Hence, you are shielded against financial liability arising towards a third party.

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What Does It Include?

Third-party protection covers a couple of things. What are they? Let’s find out.

Third Party legal liability: The legal liability of the cover in case of death or injury to the third party is unlimited. Yet, the compensation to the victim is decided by the Motor Tribunal. This is on the basis of various factors and not limited to the earning capacity of the victim.

Property Damage: If the accident results in damage of any property, then a compensation for the losses occurred to the property are settled. And this is done by the third party insurance cover. As per IRDA norms, third-party property damages are covered up to a sum of Rs. 7,50,000. However, you have the option to restrict this coverage up to Rs. 6,000. If you opt for a lesser coverage, it will lower the premiums involved.

Personal Accident Cover for Owner or Driver: In an accident, the death or the bodily injury sustained by the owner-driver of the vehicle is covered by the third party insurance. The limits for compensation are as below:

Nature of Injury Scale of Compensation
Death 100%
Loss of two limbs or sight of two eyes or one limb or sight of one eye 100%
Loss of one limb or sight of one eye 50%
Permanent total disablement from injuries other than named above 100%

Note: The above cover is subject to:

  • The owner-driver is the registered owner of the vehicle insured therein

  • The owner-driver is the insured named in the policy

  • The owner-driver holds an effective driving license, in accordance with the provisions of Rule 3 of the Central Motor Vehicle Rules 1989, at the time of accident.

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Premium Rate: How Much Does It Cost?

IRDA has standardized the car insurance premium rates for third party liability insurance with effect from 1st April, 2016 as below:

CONDITION RELATING TO ENGINE CAPACITY APPLICABLE PREMIUM RATE
Not exceeding 1000 cc Rs. 2,055
Above 1,000cc but lower than 1,500cc Rs. 2,237
Exceeding 1500 cc Rs. 6,164
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Exclusions: Look out for What's Not Covered

Unlike the main car insurance policy, a few exclusions do not cover the third party insurance. Mentioned below are a few of these conditions:

  1. Accidental loss/damage/liability borne outside the specified geographical area.

  2. Claims that arise out of any contractual liability.

  3. The usage of the car that is not in line with the commonly stipulated ‘Limitations as to Use’.

  4. The vehicle was being driven by someone who isn’t the owner or designated driver.

  5. Accidental loss/damage incurred by the third party that has resulted from any consequential loss.

  6. Liability, directly or indirectly caused by radioactive contamination or nuclear weapons.

  7. Loss, damage and/or liability caused by war, invasion and other warlike operations.

The above list features the most common exclusions. For an exhaustive listing, refer your car insurance documents.

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Claim Settlement for Third-Party Car Insurance

You need to patiently follow the right procedure for claim settlement. Why? Read on.

Third-party liability insurance follows a slightly different approach. As per the Motor Vehicles Act (1988), all disputes should be settled in the Motor Accident Claims Tribunal at the location of the accident.

In case you’re the victim of the accident and wish to claim on the third party insurance, below are the first few steps you need to take:

  • You must obtain the insurance details from the owner/driver of the vehicle involved.
  • File the First Information Report of the accident with the local police station.

Basis the above information, file for the compensation in the MACT (Motor Accident Claims Tribunal). This is to be done at the location of the accident or where the affected person lives.

In most of the cases the vehicle owner will try to make an out of the court settlement. But, if the accident involves the death of any person, any legal heir of the deceased can file a case. Under the third party insurance, they can get sufficient compensation.

Note: The Tribunal scan all the evidences and subsequent testimonials presented in the case. Post that, they finally arrive at the judgment. The owner-driver or the policy-holder will be summoned along with any witnesses for the final arbitration.

Be cautious, as the process requires coordination between different parties involved. It can take as long as six months for the ruling of the verdict.

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The Final Word

Even though third-party liability is covered, your car still doesn't receive wholesome protection. In case of own car damages, you won’t receive coverage under third-party insurance. These include damages/losses caused to your car due to accidents, theft, natural and man-made disasters, etc.

That’s why experts recommend opting for comprehensive car insurance. It covers all the above along with third-party insurance. Your premiums for a comprehensive plan is more than that of a third-party plan. But then it’s definitely worth it keeping in mind the complete benefits that you receive.

Always remember to carefully weigh the exclusions and inclusions of a plan before buying one.

For any further questions regarding the claim process, please contact Coverfox at 1800-209-9930.

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FAQs
Frequently Asked Questions

Being a good driver, do I still need to buy a third-party motor insurance?

Yes. As per the Indian Motor Vehicles Act, 1988, third-party motor insurance is a mandatory component of your motor insurance. Even if you are good driver, you may end up in an accident due to no fault of your own. The offending driver is insured with the third-party motor insurance allowing you to raise a claim for your losses.

What is the maximum compensation offered by a third-party motor insurance policy?

When it comes to bodily injuries or death, there is no specific amount set for the compensation amount. However, in the case of third-party property damage, the insurer would be accountable for a maximum amount of Rs. 7.5 lakhs.

If I had an accident and I need to raise a claim on the third-party insurance policy, how much time do I have to do so?

You have a span of about 60 days from the date of the accident to file a case with the Motor Accidents Case Tribunal. However, the earlier the better.

What documents are required to raise a third party car insurance claim?

In order to raise third-party car insurance claim it is advised to have the following documents readily available.

  • Copy of the FIR (First Information Report) as registered by local police station
  • Documented proof relating to the expenses being claimed
  • Report from the surveyor if damage to property is involved