Third-party insurance: Here's all you need to know

If you are looking to buy a car, then you should also know about insurance requirements associated with it. Under the Motor Vehicles Act, 1988 buying a motor insurance policy is mandatory in India.

What is third-party insurance?

Third-party car insurance is a motor insurance policy that is purchased to protect against any physical damages and death due to accidents or lawsuits from a third party. It is essentially a form of liability insurance. Third-party insurance acts solely on the third person.

The person purchasing the insurance policy is the “First Party”, the insurance company providing the risk cover in the form of financial aid in the exchange for the insurance premium is the “Second Party”, and the other person who has faced any type of damage by the first party is the “Third-party”. The first party is responsible for all the losses caused to the third party.

Below listed are the number of things that are covered under a third party car insurance plan:

Claims for injuries to the Third Party: This insurance covers the cost for any type of damage or injuries to the body of the insured inflicted by an accident. The insurance cover acts as a shield to the insured person, as it helps bear the cost of the third party’s injuries. It covers the cost from hospital bills to medicines for small injuries to big fractures and ultimately saves vehicle owners from the trouble and expenses.

Partial or permanent disability: If the accident leaves the victim with any partial disability, the insurance company will bear the cost and provide compensation for his medical expenses. Besides fractures or partial injuries if anyone faces permanent total disability, like paralysis of the limbs or loss of body parts due to an accident then the insurance company has to provide aid till the end.

Death of the Third Party: If the accident is severe to the level where the victim faces death, then the third-party insurance also provides compensation for death. The coverage for this is unlimited and will depend on the victim’s financial situation like the earning capacity and the dependency of the family, etc.

Vehicle damage: Majorly, the accidents on road happen due to collision between the cars. If the party faces any damage to his vehicle then the first party has to clear all dues of the losses through its insurance.

Personal accident cover to the insurer’s driver: This is being provided by some of the best car insurance where the driver of the car owner is considered a third party. And, the insurance company has to provide the cover in case of injuries, partial ability, or death of the driver. Only a few companies include this category as it is also part of the comprehensive policy.

Property damage: If the car dashes into anyone’s personal property then the insurer need not worry as this insurance cover the cost of property damages of a third person as well. Third-party property damages are covered up to a sum of Rs 750,000 but, the Insured can bring down to Rs 6,000 to reduce the cost in the “Liability Only” premium.

The premium cost for third-party insurance starts at Rs 2,072 while for comprehensive insurance you will have to pay Rs 2,727.