Being able to drive your own car is a privilege, but it comes along with the responsibility of keeping yourself and others safe on public roads while driving. To fulfil this crucial responsibility, every car owner in India must opt for adequate coverage through a car insurance policy.
The basic form of car insurance is third-party car insurance. Whether you own a vehicle or are yet to buy one, the following article will provide you with a better understanding of this insurance policy.
What is Third-Party Insurance?
It is a policy that a car owner buys from an insurance company for protection against claims made by a ‘third party’ in case of an accident involving their car.
Usually, such claims are made for physical injury or property damage of the third party. That is why this policy is also called Third-Party Property Damage or TPPD in insurance.
Remember that this policy does not provide coverage to the insured if they claim financial assistance for themselves when involved in an accident.
Who is the ‘Third Party’ in the Third Party Liability Insurance?
To understand the third-party liability insurance meaning, you have to understand who is referred to as the “third party”. Section 145 of the Motor Vehicles Act of 1988 includes everyone other than the insured driver (who is the contracting party to the motor insurance policy) as a “Third Party”.
Therefore, according to this Act, a third party may refer to the Government, an individual walking on the road, an individual driving or travelling in another vehicle, a passenger of the insured individual’s car, etc.
Third-Party Liability Insurance – Key Features
Now that we have understood what third-party liability insurance means, let us now focus on the key features of this insurance policy.
- This car insurance policy is also called an act-only insurance coverage policy.
- It is legally mandatory in India for all vehicle owners to buy this insurance policy.
- Third-party liability coverage comes with an affordable premium rate that is fixed by the IRDAI.
- It provides a basic level of safety to all car owners as policyholders.
- This four-wheeler insurance acts as a shield for a policyholder against a third party’s claims that may lead to legal liabilities for the policyholder.
Why Should I Buy Third-Party Liability Car Insurance?
As mentioned above, purchasing third-party car insurance is not optional and is mandated by the Government. This mandate has been implemented by the Indian Government (MV Act 1988) for the safety of third parties.
Since it is compulsory to purchase this car Insurance policy, multiple insurance providers offer third party liability insurance for two-wheelers and four-wheelers.
How Does Third-Party Liability Coverage Work?
In case of an accident that involves the policyholder, the insurer provides financial coverage for the costs associated with third-party property damage repair. This way, the policyholder is no longer financially burdened to make such expensive payments.
- The insured needs to immediately inform the insurer if their car meets with an accident.
- Once the insured files the claim, the insurer will appoint a surveyor for assessing the damages and calculating the estimated expense for repairs.
- After verification is completed, the claim is settled by the insurance provider.
Conclusion
Third-party insurance coverage helps you avert financial and legal hassles associated with third-party claims. Investing in this insurance policy will make you aware of driving consciously and responsibly all the time and also safeguard you from penalties and financial consequences of accidents.