Buying a suitable insurance policy for every four-wheeler vehicle is more important than you might think. As responsible drivers, you would already know that car insurance purchase isn’t just a choice but a legal mandate. In India, the Motor Vehicles Act, 1988, requires every vehicle to have at least third party car insurance. This essential coverage ensures that all road users are financially protected in the event of an unfortunate accident.
As per statistics, India is among the top countries globally in terms of the number of road accidents. With the increasing traffic and diverse road conditions, the risk of accidents is a stark reality that we all must face. So, what exactly is this basic car insurance, and how does third party car insurance come into play? Let’s find out.
What is Third Party Car Insurance?
Third party car insurance, also known as third party liability insurance, is a type of car insurance that provides coverage for damages and injuries caused to a third party in an accident involving your vehicle. It is a mandatory requirement under the Motor Vehicles Act in India and ensures that you, as the vehicle owner/driver, fulfill your legal obligation to compensate others for the harm caused by your vehicle on the road.
Here’s how a 3rd party car insurance works in general:
- Protection for Others
If you’re involved in an accident where your car is at fault, third party insurance covers the financial liabilities that arise due to injury, death, or property damage to the third party (other individuals or vehicles involved in the accident). The insurance company will step in and compensate the affected party on your behalf.
- Limited coverage
It’s important to note that third party car insurance only covers damages to third parties and their property. It does not provide coverage for any damage to your car or injuries sustained by you (the policyholder) in the accident. For such coverage, you would need to consider a comprehensive car insurance policy.
- Legal Compliance
As mentioned earlier, having at least a third party car insurance policy is mandatory by law. Driving without valid insurance can lead to hefty fines, legal penalties, and even suspension of your driving license.
- Policy duration
Third party car insurance policies are usually available for one year, and you’ll need to renew it annually to ensure continuous coverage.
- Premium calculation
The premium rates for third party car insurance is set by the Insurance Regulatory and Development Authority of India (IRDAI). It takes into account the cubic capacity of your vehicle’s engine. These rates are revised annually by the IRDAI.
While third party car insurance fulfills the legal requirements and protects others on the road, it’s important to consider additional coverage for your vehicle’s protection. Comprehensive car insurance, as the name suggests, provides broader coverage, including third party liabilities as well as damages to your car and personal injuries. This is why opting for comprehensive coverage ensures complete protection for you and your beloved vehicle.
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Third Party Car Insurance Price List – Latest Numbers
The price list for third party car insurance in India is revised annually in general and varies based on the cubic capacity of the vehicle’s engine. The IRDAI classified private cars into different categories based on their engine capacity, and each category had a corresponding premium rate for third party car insurance.
Here’s a general outline of the third party car insurance price list based on engine capacity:
|Category in terms of cubic capacity (cc)
|Up to 1000 cc
|₹2,000 to ₹3,000 per year
|Between 1,001 cc and 1,500 cc
|₹3,000 to ₹4,000 per year
|Above 1,500 cc
|₹7,000 to ₹9,000 per year
W.e.f from Jun 1, 2022, here is the third party car insurance price list:
|Category in terms of cubic capacity (cc)
|Up to 1000 cc
|₹2,094 per year
|Between 1,001 cc and 1,500 cc
|₹3,416 per year
|Above 1,500 cc
|₹7,897 per year
Similarly, the third party car insurance price list for electric cars is given below:
|Category in terms of KW
|Up to 30 KW
|Between 30 KW and 65 KW
Note that these premium rates are just approximate figures and can vary based on factors like the insurance provider, vehicle make and model, location, and any additional add-ons you might choose.
Disclaimer: It’s essential to check with the insurance provider or the IRDAI for the most recent premium rates.
What are the Primary Features of Third Party Car Insurance?
3rd party car insurance, as explained above, provides coverage for damages and injuries caused to a third party. While it is a basic and mandatory form of car insurance in India, it offers specific primary features that are crucial to understand.
Here are some of its primary features:
Third party liability coverage
The core feature of this insurance is its coverage for third-party liabilities. In case of an accident where you, as the driver, are at fault, the policy will cover the financial expenses incurred by the third party for injuries, death, or property damage. This ensures that the affected party receives compensation without you having to bear the entire financial burden personally.
Third party car insurance is mandatory by law under the Motor Vehicles Act, 1988. By having this insurance, you comply with the law and can drive your vehicle on public roads without the fear of legal penalties and fines.
Personal injury coverage
While third party car insurance doesn’t cover your injuries as the policyholder, it may cover injuries caused to passengers traveling in your car at the time of the accident. The coverage amount is limited and is generally provided as a fixed sum assured for each passenger.
The premium for this type of car insurance is determined by the IRDAI and is typically based on the engine capacity of your vehicle. It is the same across different insurance providers for the same category of vehicles.
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What are The Key Benefits of Third Party Car Insurance?
Here are some of the key third party car insurance benefits in brief:
- Legal compliance
It fulfills the legal requirement mandated by law in India and allows you to drive your vehicle legally on public roads without facing penalties or fines.
- Financial protection
It covers the financial liabilities arising from injuries, death, or property damage caused to a third party in an accident where you are at fault. The insurance company will compensate the affected party on your behalf.
Third party car insurance is generally more affordable than comprehensive car insurance since it offers limited coverage.
- Peace of mind
With this policy by your side, you can drive with peace of mind, knowing that you have coverage for third-party liabilities and won’t be solely responsible for bearing the financial burden in case of an accident.
What is Covered under Third Party Car Insurance?
Given below are the common inclusions under 3rd party car insurance:
- Third party liability
The primary inclusion is coverage for third-party liabilities. It provides financial protection for the damages and injuries caused to a third party (other individuals or vehicles).
- Property damage
If your vehicle causes damage to someone else’s property, such as their car, fence, or building, the insurance policy will cover the repair or replacement costs for the damaged property.
- Bodily injury
In case of an accident resulting in bodily injuries to a third party, the insurance will cover medical expenses, hospitalization costs, and any related treatment expenses for the injured individuals.
- Death benefits
If an accident leads to the unfortunate death of a third party, the insurance policy may provide compensation to the deceased person’s family as per legal regulations and guidelines.
- Legal fees
The insurance policy covers legal fees and defense costs if a legal case is filed against you due to the accident.
What is Not Covered under 3rd Party Car Insurance?
While third party car insurance provides coverage for third-party liabilities, it comes with specific exclusions, which include:
- Own damage cover
Third party car insurance does not cover any damages to your vehicle resulting from an accident or any other incident. Whether it’s minor scratches or major repairs, you’ll have to bear the costs yourself.
- Personal injuries
If you, as the policyholder, sustain any injuries in an accident involving your car, 3rd party car insurance will not cover your medical expenses or provide any compensation for your injuries.
- Staged accidents
If the accident is deemed to be a staged or deliberate event, where it’s proven that the collision was premeditated to make a fraudulent insurance claim, the policy will be invalidated, and no coverage will be provided.
- Driving under the influence
If you were driving under the influence of alcohol or drugs at the time of the accident, the insurance policy will not cover any liabilities or damages arising from the incident.
- Driving without a valid license
If you are found driving without a valid driver’s license at the time of the accident, the insurance company will not provide coverage, as driving without a license is illegal.
- Commercial use
Third party car insurance does not cover accidents that occur when the insured vehicle is used for commercial purposes. For commercial vehicles, separate commercial insurance is required.
- Contributory negligence
If it’s proven that the third party involved in the accident was partially or fully responsible for the collision, the insurance company may reject the claim or reduce the compensation amount accordingly.
- Driving outside geographical limits
Third party car insurance usually covers accidents that occur within the Indian geographical limits. Any incidents outside these limits may not be covered.
Disclaimer: It’s advisable to read and understand the policy terms and conditions thoroughly to know the extent of the coverage and any specific limitations that may apply.
Comprehensive Vs. Third Party Liability Car Insurance – Comparison
The following table highlights the main differences between third party car insurance and comprehensive car insurance:
|Third Party Car Insurance
|Comprehensive Car Insurance
|Provides coverage for third-party liabilities only
|Provides coverage for third-party liabilities, own vehicle damage, and personal injuries to the policyholder
|Covers damages to third parties in an accident
|Own Vehicle Damage
|Does not cover any damage to your vehicle
|Provides coverage for damages to your vehicle
|Personal Injuries Coverage
|Does not cover personal injuries caused to the driver
|Provides coverage for personal injuries to the driver
|May offer limited coverage for passengers
|Meets the legal requirement
|Generally more affordable
|Have a higher premium
|Limited add-ons available
|Wide range of add-ons for enhanced coverage
|Stress on Vehicle Protection
|Focused on liability coverage
|Provides comprehensive protection for your vehicle
|Vehicle owners on a tight budget
|Vehicle owners seeking broader protection
Depending on your budget and the level of coverage desired, you can choose the appropriate insurance policy that suits your needs.
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How to Buy Third Party Car Insurance in India – 10-Step Process
Buying third party car insurance in India is a straightforward process. You can purchase it through various channels, including insurance companies’ websites, insurance aggregators, or by visiting the nearest insurance branch.
Here’s a step-by-step guide on how to buy 3rd party car insurance in India:
Step 1: Research and compare
Start by researching different insurance companies in India and their policies. Compare the coverage, third party car insurance costs, and add-ons (if any) offered by different companies to find the one that best suits your requirements.
Step 2: Choose the policy type
Decide whether you want to buy only third party insurance or comprehensive car insurance, which offers broader coverage. In case you decide on the former option, continue following the steps below.
Step 3: Gather vehicle details
Make sure you have all the necessary details of your vehicle, such as its make, model, year of manufacture, registration number, engine capacity, etc.
Step 4: Get quotes
You can obtain premium quotes from multiple insurance providers online by entering your vehicle details and selecting the type of coverage you want. You can also use insurance aggregator websites to compare quotes from multiple insurers.
Step 5: Choose the insurance provider
Once you have compared the quotes, select the insurance provider offering the best coverage and premium that meets your needs and budget.
Step 6: Fill in the application form
In this step, fill out the application form with accurate and complete details about yourself and your vehicle. Double-check the information before submitting the form.
Step 7: Upload the required documents
You may need to upload documents such as your vehicle’s registration certificate (RC), your driving license, and any other documents as required by the insurer.
Step 8: Review policy details
Before proceeding with the payment, carefully review the policy details, coverage inclusions, and exclusions to ensure they match your requirements.
Step 9: Make the payment
Pay the premium through available payment options like credit/debit cards, net banking, mobile wallets, or UPI. Some insurers may also offer the option of paying through EMIs.
Step 10: Receive the policy document
After the payment is successful, you will receive the policy document via email or through the insurer’s portal. Keep a copy of the policy document for your records.
How to Renew Third Party Car Insurance – 10-Step Process
Renewing your third party vehicle insurance in India is a straightforward process. You can renew the policy through various channels, including the insurance company’s official website, insurance aggregator platform, or by visiting the nearest branch of the insurer.
Here’s a step-by-step guide for third party car insurance renewal:
Step 1: Set and consider renewal reminder
As the policy expiration date approaches, the insurance provider will typically send you a renewal reminder via email, SMS, etc. Ensure that your contact details with the insurer are up to date to receive timely reminders.
Step 2: Review coverage and premium
Before renewal, review your current policy’s coverage and premium. Take this opportunity to assess whether you need any additional coverage or add-ons to suit your changing needs. You can also switch to a different insurer at this point in time.
Step 3: Gather required documents
Ensure you have all the necessary documents for third party car insurance renewal, such as the vehicle’s registration certificate (RC) and your previous insurance policy details.
Step 4: Visit the insurance provider’s website
Access the insurance company’s official website or use insurance aggregator portals to start the renewal process.
Step 5: Enter policy details
Enter your policy number or vehicle details as required on the renewal page. Verify that the information is accurate and up to date.
Step 6: Get a renewal quote
The insurer will provide you with a renewal quote based on your vehicle details and the existing policy coverage. Review the quote to ensure it meets your requirements.
Step 7: Pay the premium
Pay the renewal premium using the available payment options such as credit/debit cards, net banking, UPI, etc.
Step 8: Receive policy confirmation
Once the payment is successful, you will receive a confirmation of the renewal via email or SMS. The renewed policy document will be sent to you via email or made available for download from the insurer’s portal.
Step 9: Keep the updated policy document
Save and print a copy of the renewed policy document. This updated document will serve as proof of insurance and will be required for any future claims or vehicle-related transactions.
Step 10: Renewal at insurer’s branch office
If you prefer an offline third party car insurance renewal, you can visit the nearest insurance branch of the company that issued your policy. Provide them with the required documents and pay the premium to renew the policy.
How to File a Claim Under Third Party Car Insurance – 9-Step Process
Filing a claim under 3rd party car insurance involves specific steps to ensure a smooth and hassle-free process, including the following:
Step 1: Inform authorities
If there’s an accident, immediately inform the nearest police station about the incident. They will prepare an accident report, which is essential for the insurance claim process.
Step 2: Notify your insurance provider
Inform your car insurance provider about the accident as soon as possible. Most insurance companies have a 24×7 helpline or customer support to assist with claim intimation.
Step 3: Gather information
Collect essential details from the scene of the accident, such as the contact information of the involved parties, witnesses, and any other relevant information. Take photographs of the accident site and the damages caused.
Step 4: File an FIR
If there are severe injuries or fatalities involved, it is essential to file a First Information Report (FIR) at the nearest police station. The FIR is crucial for initiating the claim process.
Step 5: Cooperate with investigation
Cooperate with the insurance company’s surveyor or investigator who will assess the damages and gather information about the accident. Provide all the necessary documents and information as requested.
Step 6: Submit the claim form
Complete the claim form provided by the insurance company accurately. Include all the relevant details of the accident, injuries, damages, and any other information required.
Step 7: Provide supporting documents
Submit the required supporting documents, including the accident report filed with the police, the FIR copy (if applicable), vehicle RC, driving license, and any medical reports or bills related to third-party injuries.
Step 8: Proceed with the settlement process
Once the claim is verified and approved, the insurance company will initiate the settlement process. The compensation will be paid to the third party affected by the accident.
Step 9: Raise claim denial or dispute request
In case of a claim denial or dispute, follow the insurer’s grievance redressal process. If unresolved, you can approach the Insurance Ombudsman or file a case with the appropriate legal authorities.
Promptly reporting the accident and following the claim process diligently can expedite the settlement and provide the necessary financial support to the affected third party. Always read and understand your insurance policy’s terms and conditions to be aware of the claim process and any specific requirements for filing a successful claim.
Things to Consider While Buying Third Party Car Insurance
- Make sure the policy you choose fulfills the legal requirement for third party car insurance under the Motor Vehicles Act, 1988. Check that the insurance company is approved and registered with the IRDAI.
- Understand the maximum coverage limit provided by the policy for third-party liabilities. Different policies may have varying limits for bodily injury and property damage claims.
- Compare premium quotes from different insurance providers to find a policy that fits your budget.
- Research the reputation and customer service track record of the insurance company before making a decision. Look for reviews and ratings to ensure the company has a good claim settlement history.
- Check if the policy offers a No Claim Bonus (NCB) benefit for claim-free years. NCB allows you to avail of premium discounts upon policy renewal if you haven’t made any claims during the previous policy term(s).
- Understand the deductible, which is the portion of the claim you need to pay out of pocket before the insurer covers the remaining amount. Ensure the deductible is reasonable and fits your financial capability.
- Review the insurer’s claim settlement process, including the documentation required, claim intimation process, and the time taken for claim settlement.
- Check the availability of customer support channels like helpline numbers, online chat, or email for assistance with policy-related queries and claim-related issues.
- Thoroughly review the policy’s exclusions to understand situations and events not covered by the insurance. Be aware of any limitations in the policy coverage.
- Understand the policy renewal process and timelines. Ensure you renew the policy before it expires to avoid any gaps in coverage.
- Read and understand the policy document, terms, and conditions, so you know exactly what is covered and what is not under the policy.
Why Buy 3rd Party Car Insurance Online?
Here are the compelling reasons why you should consider purchasing third party car insurance online:
- Buying online allows you to compare multiple insurance providers and their policies from the comfort of your home or any location with internet access. You can complete the entire process at your convenience, avoiding the need to visit insurance branches physically.
- Online insurance platforms provide instant premium quotes based on your vehicle details and coverage preferences. You can compare quotes from different insurers in real-time to find the most competitive premium rates.
- Online aggregators and websites enable easy side-by-side comparison of different policies, coverage options, and add-ons. This simplifies the decision-making process and helps you make an informed choice.
- Online platforms provide comprehensive information about the policy’s coverage, inclusions, exclusions, and other terms and conditions. You can access all the relevant details before making a purchase.
- You can also check customer reviews and ratings for different insurance providers. This helps you gauge the insurer’s reputation and customer service track record.
- Many insurance companies offer exclusive online discounts and promotional offers. By purchasing online, you may be eligible for additional cost savings on your premium.
- Online transactions are usually secured with encryption and other security measures, ensuring your personal and financial information is protected.
- After completing the purchase, the policy document is generated instantly in electronic format. You can download and print it immediately.
- Online insurance platforms are accessible 24×7, allowing you to buy or renew policies at any time, even outside of regular business hours.
- Most insurers offer an online claim process which makes it easier and faster to submit and track claims in case of an accident or incident.
- Buying third party car insurance online directly from the insurer eliminates the need for intermediaries or agents, which can lead to cost savings as there are no commission fees involved.
Is third party car insurance mandatory in India?
Yes, this type of car Insurance is mandatory in India. Every vehicle on the road must have at least basic third party insurance to comply with the law. Driving without valid insurance can lead to hefty fines, legal penalties, and even suspension of your driving license.
Does third party car insurance cover damages to my vehicle?
It only covers damages and injuries to third parties involved in an accident and does not provide coverage for any damage to your vehicle or injuries sustained by you (the policyholder) in the accident.
What does third party car insurance not cover?
It does not cover damages to your vehicle, personal injuries sustained by you in an accident, damages due to natural disasters or theft, or damages caused while driving under the influence of alcohol or drugs. It also excludes damages resulting from war, nuclear risks, or any act of terrorism.
Can I add additional coverage to 3rd party car insurance?
While most of these plans offer limited coverage, some insurance companies may offer add-ons that can be purchased at an additional cost.
What is the premium calculation process for third party car insurance ?
IRDA defines the third party car insurance premium based on the cubic capacity of your vehicle’s engine. The premium rates are revised annually and can vary depending on the engine capacity.
Can I buy third party car insurance online?
You can easily purchase third party car insurance online through insurance company websites or insurance aggregators. Online platforms offer convenience, instant quotes, easy comparison, and secure payment options.
Is there a waiting period related to third party car insurance?
No, there is no waiting period involved. The coverage starts immediately after you purchase the policy and make the premium payment.
Can I switch from third party car insurance to comprehensive car insurance?
You can make the required switch at the time of policy renewal. It’s advisable to evaluate your needs and consider additional coverage for your vehicle’s protection and personal injuries.
What is No Claim Bonus (NCB) in third party car insurance?
NCB is a bonus given to the policyholder as a reward for not making any claims during the policy term. It results in a discount on the premium at the time of policy renewal. However, NCB is only applicable to comprehensive car insurance.