What is Third Party Car Insurance
10 May 2018
What is Third Party Car Insurance?
When you shop for the best car insurance policy, you will come across two important terms – third party car insurance and comprehensive car insurance. Third party insurance is the policy that gives you bare minimum coverage. In this article, let us understand more about this policy, coverage details and how it differs from a comprehensive policy.
If you are a car insurance policyholder, a third party car insurance plan provides you coverage against third-party liabilities only in case of injuries. If your vehicle causes any bodily injury or damages to the third person’s property, the expenses that you have to incur in such a case is also covered in a third-party car insurance plan. Such a policy helps you to stay protected in case of an unfortunate incident when you are at fault.
In the absence of this policy, you might have to bear a huge amount as legal charges if the third-party files a case against you for the damages caused to him/his vehicle by you/your vehicle. The Motor Vehicles Act, 1988 makes it mandatory for all car owners to have at least a third party car insurance plan, if not a comprehensive coverage plan.
What Does It Cover?
A third-party insurance plan provides you with limited coverage. If you ask any car insurance expert, he would advise you to opt for the comprehensive policy instead of the third-party insurance policy, because the coverage offered in the former is wider and more meaningful.
Only under the following instances, will you get a coverage under a third-party car insurance plan:
- Bodily injury or death of the third party
- Damages to the vehicle of the third party
- Death of owner/driver of the insured vehicle
- Permanent disability of owner/driver of the insured vehicle
Even in these cases, service providers have certain restrictions on the maximum compensation that they can provide for third-party damages. For example, Bharti AXA provides a maximum compensation of INR 7.5lakhs as third-party damages.
Is a Third-Party Insurance Plan Enough For Your Cars?
As stated above, a third party insurance plan covers only damages due to injuries caused to the third party or damages to third party’s property. It doesn’t provide any protection for the insured or insured’s car.
Therefore, when you are looking for a four wheeler insurance plan, it is highly recommended that you opt for the comprehensive plan for your benefits. You should get at least four to five car insurance quotes to assess the terms & conditions of third-party insurance plans of various service providers.
More often than not, insurance companies can reject your claims in a third party insurance plan, if your claims don’t follow the structure mentioned in the company’s terms. Hence, you have to read the fine print clearly and understand the inclusions & exclusions, before you make the final decision.
Do you own a second-hand car, budget car or any other low-value car? If yes, a third-party insurance plan would be enough for you. Even in a tragic incident such as damages to your own car, it wouldn’t cost you much to repair your low-value car. So, you may choose to spend these expenses out of your pocket, instead of paying a high premium for a comprehensive policy.
In all other cases, a comprehensive car insurance policy is the best bet as it provides you extensive coverage and peace of mind when you are on the road. It gives you immense assurance and confidence to know that you are taken care of, in case of an emergency.