All you want to know about third-party car insurance

Posted on: Dec 3, 2021 | 3 mins | Written by: HDFC ERGO Team

All you want to know about third-party car insurance

A car is undoubtedly a precious possession for anyone, even if it's a basic model. And though it is a sophisticated machine, it can hurt someone on the road or damage someone's property in case of an accident. Also, thanks to India's massive population and highly congested roads, accidents are common. This is why, if your car gets involved in an accident and you end up causing harm to a third party, the law requires you to offer due compensation. This is where third party insurance comes in handy. It protects your finances even while providing restitution to the affected third party. Read on to know more.

What is Third Party Car Insurance?

There are mainly two types of motor insurance covers. They are the comprehensive insurance cover and the third-party liability cover. In the latter, you get coverage only for the third-party damages. You do not get any coverage for your own vehicle. This is a basic form of motor insurance and it is compulsory for you to get such a plan. The third-party plans are very economically priced and the covers are fixed. You cannot customise a third-party plan as it offers a basic third-party cover at a nominal price.

What is Covered Under Third-Party Car Insurance?

With a third-party policy, the following kinds of cover are available to third parties who might suffer in such an accident where your vehicle is involved:

● Death of a third party in the accident

● Any kind of hurt or injury to any third party in the accident

● If the third party suffers partial or full disability as a result of the accident

● If the property of a third party is damaged as a result of an accident

How Does Third-Party Car Insurance Work?

As a vehicle owner, a third-party insurance policy is meant to protect you as well as third parties. The penalties for causing hurt or damage to third parties as pronounced by courts and tribunals can be quite high. In such a situation, the insurance will protect the vehicle owner from having to bear excessive financial burden or liability while ensuring that the third party gets due compensation.

Why is Third-Party Car Insurance Mandatory?

As a vehicle owner, it is your duty to drive safely and keep yourself, your passengers, your vehicle and everyone else safe. If however there is an accident and you end up hurting a third party or damaging his property, it becomes your responsibility to pay for the losses. This is a fair and legal thing to do. However, paying the compensation can be very expensive and so, the third-party cover comes in handy.

Since you are completely obligated to take care of the expenses and paying out of your own pocket is quite difficult, third-party motor insurance plans have been made mandatory. This allows you to do the right thing without having to worry about the finances.

Benefits of Third-Party Car Insurance

There are several benefits of getting third party car insurance coverage such as:

• Inexpensive

One of the biggest advantages of a third-party plan is that it is inexpensive. You pay a very small amount of money for this coverage and that helps you to manage your budget effectively.

• Many covers

You get several covers under a third-party car insurance policy. This is very cost-effective and beneficial and helps you to drive properly.

• Keeps you legally protected

Last but not least, a third-party liability car insurance plan allows you to stay legally covered. You will not be penalised by the traffic police if you have your third-party policy documents with you when driving your vehicle.

As you can see, there are some wonderful benefits of getting a third-party car insurance cover, so get one if you have not done so already.

Consequences of being caught driving without third-party insurance

If you do not have a third-party insurance policy and are caught by the traffic police, you can end up in a lot of trouble. The traffic police are authorised to issue challans if they find someone driving a vehicle without a valid third-party insurance policy. Effective from September 01, 2019, you can get a challan of as much as INR 2000 if found driving without insurance. Further, the authorities can also send you to jail for as long as three months in extreme cases. Therefore, it is unwise to drive without insurance.

Third-party insurance when you purchase a new vehicle

Keeping in mind that many people do not renew their insurance on time, regulatory authorities have changed many aspects of third-party policy. For instance, any new vehicle purchase must now be accompanied by the purchase of a compulsory long-term third-party insurance policy. In case you purchase a new two-wheeler, you are now required to get a five-year third-party insurance policy. With the purchase of a new four-wheeler, you are required to get at least three years of third-party insurance policy. These can be combined with a single year's own damage cover for maximum protection of your vehicle.

Which vehicles are exempt from third-party insurance requirements?

As with the case of vehicle registration, certain categories of vehicles are allowed to operate on public roads without holding a valid third-party insurance policy. For internal combustion vehicles which have a limited top speed of no more than 25 kmph, third-party insurance is not needed. Also, for electric bikes and scooters that have motors of less than 250 watts of power and are restricted to a top speed of 25 kmph, third-party insurance is not required.

When to choose third-party insurance?

There can be a number of situations when you can choose only third-party cover, instead of choosing a comprehensive policy.

1. You are hard-pressed for funds.

2. You have purchased a new vehicle and are planning to use it very rarely.

3. You are moving to a different location and want to keep the vehicle in storage.

4. You are planning to sell your vehicle in the future and do not intend to use it until then.

Which is the best way to buy third-party insurance?

There are multiple ways to buy THIRD PARTY INSURANCE, but the best approach is to go online and directly buy from the website of the insurance company. While prices are fixed, buying car insurance directly from the insurer's website can bring you two good advantages. It allows you to buy insurance from anywhere you want and at any time. Also, you get instant cover. Your cover starts from the moment you make the payment. The policy is sent to you immediately.

Conclusion

All in all, make sure you have third-party insurance before hitting the road with your car or any other vehicle for that matter. Compare different insurers online to zero in on one that has a good reputation and a hassle-free claim settlement process.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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