Third Party Liability Insurance

Before understanding Third Party Insurance for car or bike, Let's understand 

Who is Third party?

First Party : The Insured Individual who buys the Insurance Policy

Second Party : The insurance provider (Insurance company), from whom the insured individual purchases the policy.

Third Party (3rd Party) : Another Individual or company claims to have suffered or incurred damages/losses in the Accident. 

Example:

Mr.X, while driving his car looses control and hits Mr. Y's car infront of him due to low visibility in the night. In this case, First party is Mr. X, Second party is Insurance company, Third party is Mr. Y. The third party liability is the damages or injuries caused to Mr. Y, where Mr. Y is the third party. 

Third Party Insurance meaning

Third party insurance for bike or car is a policy purchased by an insured individual (the first party) from an insurance provider (the second party) to provide coverage against claims made by another person (the third party).

Simply put, 3rd party insurance compensates for accidental damages or injuries caused to a third person or their property by the policyholder. The extent of this compensation is governed by the terms and conditions of the insurance policy.

In the example above described : Since Mr. X (1st Party) is at fault, the third party car insurance taken protects him from legal and financial liabilities arising from injury or property damages caused to Mr. Y (3rd party).

On the other hand, comprehensive car insurance offers broader coverage. It includes 3rd party liability as well as protection against damages to the insured vehicle itself (own damages), covering events like natural disasters, theft, fire, vandalism, and accidents.

How does Third-Party Liability Insurance work?

Third Party Property Damage (TPPD) covers the cost of repairing or replacing property belonging to someone else, damaged due to the policyholder’s actions.

If an accident occurs, it’s crucial that the insured informs the insurance provider promptly. A claim may be filed by the third party, and it becomes the insurer’s responsibility to manage and resolve the claim.

Third-party Insurance benefits :

• Covers damages or injuries caused to third-party individuals or property, with compensation 
  
• Compensation for injuries is determined by the Motor Accident Claims Tribunal (MACT) 
  

in addition to 3rd party insurance benefits, choosing a trustworthy insurer ensures smoother claim handling during emergencies. find the Top third party bike insurance or car insurances here.

How to File a Third-Party Insurance Claim

1. Report the Incident: Notify your insurer immediately after the accident. Delays may lead to claim rejection.
2. File an FIR: Register a First Information Report with the local police if there are injuries or significant damages.
3. Collect Documentation: Gather your insurance policy, driving license, registration certificate, and FIR copy.
4. Gather Third-Party Details: Note down the third party’s name, contact, and vehicle details. Record witness information if available.
5. Submit Claim Form: Complete the insurer’s claim form with accurate accident details and submit it with the necessary documents.
6. Attend Legal Proceedings: Third-party claims are settled through MACT, so ensure attendance at hearings.
7. Claim Settlement: Once approved, the insurer pays the compensation to the third party.

Timely reporting and legal cooperation ensure a smooth claim experience.

Inclusions & Exclusions of Third Party Insurance coverage

Inclusions	Exclusions
Damage to third-party vehicles	Damage to own vehicle
Property damage up to ₹7.5 lakhs	Personal belongings inside the vehicle
Injury, permanent disability, or death of 3rd party	Injuries sustained by the policyholder

Limitations of 3rd Party Liability Insurance

No Customization options: Unlike comprehensive plans, it can't be tailored with add-ons.

Please note Third Party insurance don't cover the own damages, for broader protection, consider upgrading to a comprehensive policy.

In the example discussed above : The loss or damage caused to Mr. X or his car will not be covered unless if he has taken own damage (or comprehensive) insurance. 

Is Third Party Insurance mandatory?

Yes, According to the Motor Vehicles Act, 1988, all vehicle owners in India are required to have at least a third-party insurance policy to cover liability for damages or injuries caused to third parties in an accident.

Consequences of not having Third-Party Insurance :

• Fines and Penalties: Driving without third-party insurance can result in fines and penalties, including imprisonment in some cases.
• Liability: If you're involved in an accident without third-party insurance, you may be personally liable for damages or injuries caused to third parties.

Conclusion

Third-party car insurance is a legal necessity in India and offers vital financial protection against liabilities to others. Not having a Third-Party insurance would attract fines and penalties, including imprisonment in some cases. For complete coverage—including protection for your own vehicle—opting for a comprehensive car insurance policy is highly recommended.

Regards,

Honvest Team.