In India, if you own a four-wheeler, then it is mandatory to buy a third party car insurance policy as prescribed under Section 146 of the Motor Vehicles Act, 1988. These policies are also known as “Act Only” or “Liability Only” policies, as they cover third-party liabilities only and are mandated by law. They do not cover damages to the insured vehicle. A comprehensive car insurance policy offers complete coverage, including third-party liability and own-damage cover.
If you are found driving your car without a valid four-wheeler insurance third-party policy, then you might have to pay a fine of up to ₹2000 and/or face imprisonment of up to three months. The fine can increase up to ₹4000 for repeated offences. In this article, we will look at the reasons why you should opt for 3rd party car insurance apart from fulfilling the legal requirement.
Who is a Third Party in Car Insurance?
There are three parties to a car insurance contract:
- First party – The car owner/policyholder.
- Second party – The insurance provider
- Third-party – Anyone except the first and second parties.
Hence, when you buy insurance for a car third party, you get coverage for damages to third-party property and/or injuries to a third party due to an accident or collision involving your insured car. If these damages are severe, paying the cost of repairs/treatment and/or compensation as determined by the court can burn a hole in your pocket. This is where third-party insurance for four-wheelers comes in handy.
Inclusions of a Third-party Car Insurance Policy
Here are the inclusions of a third-party car insurance policy:
● Damage to property
If your car causes an accident that results in damage to third-party property, then you are legally required to pay for the damages. Depending on the severity of the damage, the costs can be minimal (if the property requires minor repairs) or extensive (if the damage is severe). With a third-party car insurance plan, the insurer covers such costs.
● Physical injuries
If in an accident or collision caused by your car, a third party suffers from physical injuries, then you are required to pay for the treatment and hospitalisation costs. Depending on the extent of injuries, these costs can soar in no time. A third-party four-wheeler insurance policy offers financial protection from such expenses.
● Partial or permanent disability
Car accidents can be dangerous. If your car causes an accident and a third party suffers from partial or permanent disability, then your responsibilities are as follows:
- Partial Disability – You will have to pay for the medical treatment and hospitalisation expenses
- Permanent Disability – You will have to pay a pre-assured sum to the affected third party
It is important to note that the court can direct you to pay compensation to the third party in such cases too. While insurance companies offer coverage, there is a limit to the amount. If the compensation is more than this limit, then you will have to bear it out of pocket.
If the accident caused by your car results in the death of a third party, then the court tribunal determines the compensation amount based on various factors. Usually, insurance companies cover such compensations.
Exclusions of a Third-party Car Insurance Policy
A third-party car insurance policy does not cover damages:
- To the insured car for any reason
- To a third party if driving under the influence of alcohol or any other intoxicant
- If the policy has lapsed
- If the driver does not have a valid driving licence
As you can see, apart from being a mandatory requirement, a third-party car insurance policy offers complete coverage from third-party liabilities arising due to an accident/collision involving the insured car. You can buy 3rd Party Car Online Insurance and choose a provider with a good track record of offering excellent services. Buying motor insurance online allows you to compare providers in a hassle-free manner. Make sure you hold a valid third-party insurance policy and all the required documents before getting your car on the roads. Good Luck!