Coverage Details of Third Party Car Insurance in India

In India, it is mandatory for all cars to have a third party liability insurance policy as mandated by the Motor Vehicles Act, 1988. A third party car insurance policy offers coverage from damages to a third-party person or property caused by an accident or mishap involving the insured car. Many car owners buy car insurance with only third party coverage since it is mandatory and offered by most car dealers. In this article, we will talk about third party car insurance and look at the coverage it offers.

What Is Third-Party Car Insurance?

A third party four-wheeler insurance policy offers legal and financial protection to the policyholder against damages caused to third-party property or person by the insured car. It is a basic policy that protects you from any third-party claims if your insured car gets into an accident. Further, the Motor Vehicles Act, 1988 makes it mandatory for all cars to have a minimum third-party liability cover in India. If any car is caught without a valid policy, then the car owner can be fined and might even have to face a prison sentence. 

However, before you purchase a 3rd party car insurance plan, it is important to understand the coverage it offers so that you can be prepared for any such emergencies.

Coverage Offered by a Third Party Car Insurance Policy

 A third party car insurance policy offers the following coverage:

• Injury or death of a third-party person

If your car causes an accident that leads to a third-party person getting injured, then the cost of treatment, including hospitalisation charges, is borne by the insurer. Further, if the third-party person dies as a result of the injuries, then the legal and financial liabilities are also covered by the third-party insurance policy.

• Damage to a third-party property

If your car causes an accident that leads to a third-party property getting damaged, then the insurer offers coverage for the costs of compensating for the said damages.

• Personal accident cover for the owner-driver

By paying a small premium, you can also get a personal accident cover for the owner-driver of the car amounting to ₹15 lakhs. This cover takes care of any hospitalization or medical treatment costs incurred due to the owner-driver getting injured during an accident. If the owner-driver succumbs to the injuries, then the nominees receive the sum insured.

Apart from buying a third-party insurance policy, you also need to ensure that you have a physical or digital copy of the policy in the car or with you at all times.

Exclusions of a Third Party Car Insurance Policy

A third party car insurance policy does not offer coverage under the following conditions:

• Any damage sustained by the insured vehicle is not covered by a third party car insurance policy
• If you drive your car without a valid driving license and meet with an accident causing damage to a third-party person or property, then the policy will not offer coverage.
• If you drive your car under the influence of alcohol or any narcotic substance and meet with an accident causing damage to a third-party person or property, then the policy will not offer coverage.
• You will not be able to file an insurance claim for third-party damage if the accident happens outside the geographical limits specified in the policy.
• If you own a private car and use it for commercial purposes when it meets with an accident, then the insurer can reject your claim.
• Any third-party damage caused due to a war-like situation is not covered under a third party car insurance policy.

Third-Party Car Insurance Premium

The premium of third party car insurance in India is determined by the Insurance Regulatory and Development Authority of India (IRDAI) based on the engine capacity of the car. Currently, the premium rates are as follows:

Summing Up

While a third-party car insurance cover is legally mandatory, it also offers financial protection against losses due to damages caused to a third-party person or property due to an accident or mishap involving the insured car. The coverage offered by a third party car insurance policy is more or less standard. However, make sure that you go through the policy wordings to understand the inclusions and exclusions before signing the dotted line. Also, research the market and compare car insurance plans to find the best policy for your needs. Good Luck!