According to the Indian Motor Vehicles Act of 1988, it is compulsory to have an insurance policy. This mandate was put in place to make sure that any loss that is caused to another party can be dealt without leading to a legal hassle. This is one of the most affordable insurance covers that you can purchase while complying with legal requirements.
What is Third-Party Car Insurance?
Third-party car insurance also known as ‘act-only’ insurance policy is a statutory requirement for all car owners. In this type of insurance plan, the insurer offers coverage against damage to the third-party vehicle, physical injury and personal property. This policy does not provide coverage for any damage to your vehicle.
How Does It Work?
In case you meet with an accident, the card insurance provider provides financial assistance and pays for the repair costs of the third-party property. Therefore, it reduces your financial burden. Whenever there is an accident, you have to inform the insurer immediately before filing for an insurance claim.
After the claim is filed, the insurer appoints an assessor to determine the extent of damages and verify the estimated repair cost. After the verification is done, the insurance company will settle the claim.
What Is Covered/Not Covered Under a Third-Party Car Insurance
Inclusions:
Third-party car insurance policies provide coverage for,
- Damages to a third-party by the vehicle that is insured.
- Damages to the vehicle, physical injuries, death and damage to the property.
Exclusions:
The insurer does not provide compensation, in case
- The accident was caused because the driver was under the influence of alcohol
- The driver is below 18 years of age or does not possess a valid driving licence
- The accident was caused deliberately
- The car was used for illegal activities or commercial purposes
- The car gets stolen
Advantages and Disadvantages of Buying a Third-Party Car Insurance
Purchasing third-party car insurance has its own sets of advantages and drawbacks. They are:
Advantages:
The cost of a third-party insurance policy is one of its key advantages. If you cause some damage to a third-party in an accident, the entire amount (up to ₹7.5 Lakhs of property damage) will be settled by the insurer. In case you do not have a third-party insurance policy, you might be sued and have to pay for the legal expenses from your savings. Kindly note that the claim cap is not applicable in case of death, injuries or permanent disabilities. In such an instance, the total treatment cost will be covered by the insurer.
Since third-party car insurance meets the minimum legal requirement for motor vehicle insurance, you do not have to worry about being pulled over for not having one.
Disadvantages:
This type of insurance does not cover any damages that occur to your own vehicle. In case you are responsible for the accident that caused the damage, then you have to pay the repair costs.
How to Claim for Third-Party Insurance Compensation?
You can raise a claim under the following situations:
- You can file an insurance claim for hospitalisation charges, in case the individual is unable to earn because of a permanent total/partial disability or bodily injury.
- The dependents can claim compensation in case of the demise of the owner of the policy depending on his/her income. The turnover time for claims for death or injury is three years.
You can claim for compensation by following the three steps mentioned below:
- The first step of claiming compensation is to file an FIR in the police station closest to you and collect the charge sheet. The crime has to be registered in a special court known as Motor Accident Claims Tribunal (MACT)
- The cases for damage of property, death or health of a third-party should be filed where the insured individual resides. The court hears the sides of both the parties involved and analyses the proofs before fixing any liabilities.
- In case it is a case of property damage, then the report from surveyor, inspection officer and the actual bill is required to calculate the total loss.
Having a third-party car insurance can save you from financial as well as legal hassles. Although it provides only basic coverage, it gives you peace of mind to know that you have adequate financial protection against any damage that you might cause to other people in case of an accident. A third-party insurance plan differs from one insurer to another. Therefore, make sure to compare the benefits and rates offered by various insurance companies before you make the final choice. After you apply, you can check vehicle insurance status online.
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