Accidents are unfortunate and unplanned and can occur due to various reasons including the driver’s carelessness, vehicle malfunction, or simply poor road conditions. Regardless of the reason, there are chances that accidents may lead to bodily injury of a third party or cause damage to their vehicle or property.
This may cause severe financial strain on the owner-driver. However, if you have a valid third-party car insurance, it may act as a saviour in such unfortunate situations.
To begin with, the first party in car insurance is the car’s owner or the insurance policyholder. He is the person who pays the premium and can raise a claim. Sometimes, comprehensive insurance is also referred to as first-party car insurance. On the other hand, a second party in four-wheeler insurance is the insurance company that offers the insurance coverage to the first party.
Third-party in an insurance can be anyone other than the first-party. Third-party insurance is mandatory in India according to the Motor Vehicles Act, 1988. Thus, it is essential to understand what it means, how it works, what it covers and its benefits. Read on to learn more about third party car insurance.
What is Third-Party Car Insurance?
Third-party car insurance protects you from third-party liability due to an accident causing injuries or damage to third-party property or person. In such a situation, the insurance provider compensates for the hospitalisation or repair charges of the third-party.
Thus, you get a financial cushion in case of an unforeseen event. This policy is a legal requirement for any vehicle to be eligible to ride or run on public roads. However, it must be noted that 3rd party car insurance does not provide any coverage to the insured or the policyholder’s vehicle.
Coverage under Third-party Car Insurance
Third-party insurance policies usually cover the following:
- Third-party liability: Covers liabilities arising from injury or death of a third party due to an accident caused by the insured vehicle.
- Property damage: Covers damages caused to third-party property or vehicle due to the fault of the insured’s vehicle.
- Legal expenses: Covers legal expenses incurred due to lawsuits filed by third parties related to the accident.
- Personal accident cover: Some third-party insurance may also offer personal accident coverage for the owner-driver.
How Does Third-party Car Insurance Work?
If a policyholder meets with an accident, the insurance provider offers financial support to cover the damages for the third-party property, vehicle or cost of hospitalisation in case of bodily injury. Thus, it reduces the financial burden on the insured.
The policyholder, however, must inform the insurance provider immediately in case of an accident, even before filing the claim. They must follow the procedure and submit the required documents, which the insurer shall verify. Once the claim is filed, a surveyor is appointed by the insurer, who verifies the cost of damages and other aspects. Based on the report submitted by the surveyor, the claim is settled.
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Benefits of Third-Party Car Insurance?
The below benefits prove why buying third-party car insurance online is a must:
- Offers legal coverage: 3rd-party car insurance is a mandatory requirement as per the law. If caught driving without valid insurance, you must pay a hefty fine and/or imprisonment for up to 3 months. Moreover, for repeated offences, the penalty amount also increases. Hence, third-party insurance gives you peace of mind by safeguarding you from legal hassles and fines.
- Offers financial compensation: Even if you take immense care and follow all the traffic rules, it is still likely that you may face an accident. If you are responsible for property damage or causing bodily injury to a third party, you must compensate for the losses, thus putting you in a financial fix. With third-party car insurance, in case of such an incident, the insurance provider compensates for the financial losses and relieves you from financial setbacks.
- Can be clubbed with an own damage cover: Although third-party four-wheeler insurance may not offer comprehensive coverage, it can be combined with an own damage cover to broaden the coverage.
The own damage car insurance comes into force if you damage your car or suffer bodily injury. The in-built personal accident cover can help manage your hospitalisation and treatment expenses. The benefits are paid out to the beneficiary in case of the policyholder’s death.
- Is cost-effective: Third-party car insurance prices are typically lower than comprehensive car insurance. Since it is a mandatory policy with limited coverage, affordability is its highlight.
- Provides ease of purchase: Buying and renewing third-party car insurance online is straightforward and convenient, especially if you purchase it from a brand like Tata AIG. With seamless processes, a user-friendly interface and quick turnaround time, Tata AIG ensures that purchasing or renewing car insurance is a breeze. Moreover, you can compare or purchase a policy 24×7 at your convenience.
- Offers digital records: The policy documents are issued instantly and are available online. This helps keep digital records and the policy is available 24×7. It ensures you do not lose essential documents and get access to them at the time of need.
Conclusion
There is no denying that third-party car insurance offers financial and legal help and gives the policyholder peace of mind. However, it is essential to know that the cost and coverage offered by various insurance companies may vary based on different factors. Hence, comparing and learning about the offerings is crucial before purchasing or renewing your existing policy. Moreover, having all-round coverage offered by comprehensive car insurance is more beneficial and effective.
