In India, it is mandatory to insure any vehicle driven by a motor engine. At least (Third Party Insurance) must be there and has also been made compulsory by law. Driving a vehicle without third party insurance can result in a fine of up to Rs 2000 and a jail term of up to 3 months. Not only this but due to repeated negligence, both these punishments can also happen simultaneously. In this article, let us know what it is Third Party Insurance. What are its benefits and what are the rules?
What is Third Party Insurance
Third party insurance is an insurance policy that provides compensation to that person in case your vehicle causes damage to another person’s vehicle or body or property. That is, you do not have to compensate for the damage caused to another person by your vehicle, but the company with your insurance policy does it. The court process involved in determining compensation for the damage caused to that other person is also borne by the company with your insurance policy. That is why this insurance is also called Third Party Liability.
To understand third party insurance better, it is better to understand the meaning of the word the third party included in its name-
- First party: That is, the first party is the person who has purchased the policy from the insurance company. This means that the policyholder is the first party.
- Second-party: That is, the second party is the insurance company from which the vehicle insurance policy is purchased.
- Third-party: That is, the third party is the person who has suffered damage from the vehicle of the policyholder (first party).
Actually, if someone is harmed by your vehicle, then you should pay the damages. But, having Third Party Insurance, your insurance company bears the responsibility to cover that loss. This is the main advantage of this policy.
Just imagine, if the collision of your vehicle causes more damage to a very expensive vehicle or if a very rich person loses his life, then there may be a case of damages of lakhs or even crores against you. Because the compensation for bodily harm done to a person will be decided by the status of that person, not according to your status.
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Personal accident insurance of 15 lakhs is mandatory along with third party insurance
IRDA has also made personal accident cover of Rs 15 lakh mandatory along with third party insurance. This will apply to all types of motor vehicles such as scooters, bikes, cars and commercial vehicles. The owner-driver of that vehicle will get benefit from this. However, if you have taken a Compulsory Personal Accident Cover with one vehicle then there is no need to take it separately with each vehicle.
What types of damages are compensated under third party insurance?
The following types of damages are covered under third party insurance-
- Death or bodily harm to another person.
- Damage to another person’s vehicle or equipment.
- Damage to another person’s property, home, wall, or belongings.
- Death of the driver/owner of the vehicle insured (due to the inclusion of Compulsory Personal Accident Insurance).
- Permanent disability of the driver/owner of the vehicle insured (invoking Compulsory Personal Accident Insurance Policy).
What types of damages are not included
The following types of damages are not covered under Third Party Insurance-
- In an accident, damages caused to your own vehicle are not covered.
- Can’t get any compensation even if your vehicle is stolen or destroyed.
- You also do not get any compensation for injuries caused by your vehicle.
Comprehensive insurance can be taken for compensation for damage to your vehicle
Comprehensive Insurance has been created to overcome this shortcoming of third-party insurance. In Comprehensive Insurance, you also get the facility of First Party Insurance along with Third Party Insurance. That is, compensation is also available in the event of damage to your vehicle. There are also different types of add-ons to get even more features.
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How do Third Party Insurance?
When you buy a new car or bike or any vehicle, usually the vehicle showroom only insures your vehicle. Most of the auto sellers have tie-up with some general insurance companies and agents of the insurance company are available there to insure.
You can take a policy from any insurance company: If you want, you can also get your vehicle insured by any other insurance company. Because getting insurance from a particular company is not mandatory. After the completion of the term of the insurance for the first time, if you want, you can renew the insurance of the old insurance company only. Or if you want, you can also renew your insurance policy from another insurance company.
You can also get vehicle insurance done online: You can get your vehicle insured offline as well as online at your convenience. To get offline insurance, you have to contact the insurance agent or go to the insurance company’s office. You can also do an online insurance policy sitting at home with the help of your computer or mobile. We are also telling below how to do insurance online.
Get insurance with the help of the insurance company website
The process of getting Third Party Insurance done online from an insurance company is as follows-
- Step 1: Go to the company’s website. Select the option of car insurance or two-wheeler according to your vehicle from the links on its homepage.
- Step 2: Fill in the details asked about yourself and your vehicle. Such as vehicle registration number, name, mobile number, email id, etc.
- Step 3: After clicking on Get Quote, you will see the premium rate (insurance installment) of the policy being offered by that company.
- Step 4: Select the insurance policy and fill in the other details asked for. Finally, one can complete the process of buying the policy by paying the insurance premium.
Third party insurance can also be taken through an insurance aggregator
The procedure for buying third party insurance through an aggregator is as follows-
- Step 1: Open the website of the insurance aggregator. On its homepage itself, you will find links to various types of insurance products. Select among them according to your need (eg Car Insurance).
- Step 2: In the next steps you are asked to enter some details about your vehicle and about yourself. Such as vehicle number, model of vehicle, registration year, previous insurance company, expiry date of previous insurance etc. You also have to choose between the option of Comprehensive Insurance or Third Party Insurance.
- Step 3: After this, if you click on Get Quotes, then the list of insurance plans of many companies and their premium rate will appear. Select your preferred policy and fill in the required details.
- Step 4: Finally buy the policy by paying the insurance premium.
Can also renew online, can also change company
The process of renewal of old vehicle insurance is also similar to that of new vehicle insurance. For this also, if you want, you can directly use the website of the insurance company. Or, you can buy insurance by visiting the website of Insurance Aggregator. While renewing the insurance, you can also change the insurance company if you want.
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Procedure to claim third party insurance in case of accident
In case of an accident with your vehicle, your insurance company first appoints a surveyor when the claim is filed. That surveyor assesses the entire damage caused by the accident and sends its report to the insurance company. In this way, after the completion of the verification process on behalf of the company, your claim is settled.
Therefore, as soon as a serious accident happens to your vehicle, you should immediately inform your insurance company. Along with this, some important information related to the accident should also be collected, such as-
- Accident format with date and time
- Details of the person insured and the insurance policy purchased
- Details of damage to the vehicle which has been damaged, its driver, details of damage to passengers
- Details of witnesses present at or near the spot
- Weather and visibility condition details at the time of the incident.
- Photographs and other evidence of the accident site should also be collected.
Insurance of 3 years for a new car and 5 years for a new bike is mandatory
According to the Motor Vehicles Act, 1988 of India, third party insurance is legally mandatory for all motorized motor vehicles. This rule applies to all two-wheeler cars (private cars) or commercial vehicles.
From September 2018, the Supreme Court has made third-party insurance for 5 years mandatory for all new two-wheelers. For cars, four-wheelers and other commercial vehicles, it is mandatory to have third-party insurance for at least 3 years.
Relief in the minimum period on getting comprehensive insurance
When buying a new two-wheeler (bike or scooter) you need to get 5 years of insurance, that is if you only get third party insurance. If you take comprehensive insurance, then you can get insurance for only 3 years. Since, in comprehensive insurance, the insurance company also compensates for the damage to your own vehicle, and it automatically includes the benefits of third-party insurance. Therefore, comprehensive insurance costs more than just third-party insurance. Therefore, this exemption is given in the tenure of Comprehensive Insurance.
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