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Is Having Third-Party Auto Insurance Really Necessary?


Written by Saad Ahmad

Updated Oct 18, 2023

Third-party automobile insurance is the most basic type of coverage that every driver must have while on the road.

Purchasing the most basic auto insurance plan, such as a Third-Party Liability coverage, ensures that you are following the law. It's also less expensive and helps you avoid paying fines. Is it, however, sufficient to choose a plan that only provides limited coverage? Should you purchase comprehensive auto insurance coverage, even if it is costly? The purpose of the following article is to provide answers to such queries. Is purchasing a third-party auto insurance policy, especially the most vital one, truly beneficial? Let's examine the choices and come up with a definite solution. First, let's go through what you receive if you solely choose the Third-party policy.

 Is Having Third-Party Auto Insurance Really Necessary?

What does a Third-Party Car Insurance Policy Entail?

A third party is anyone other than you (the first party is the automobile owner) and your auto insurance carrier (the second party). For example, a cyclist, a pedestrian, drivers of other cars, hawkers, and so forth. It's possible that you'll inadvertently bring harm to such folks. You can also end up causing harm to their property (vehicles, homes, farms, etc.). If this occurs, and you are at fault, you must pay for therapy or compensate them for their loss. The compensation sum will be determined by the Motor Accident Claim Tribunal, and it may be in the millions of rupees. This is where your Third-Party Automobile Insurance Policy comes in. Your auto insurance provider will cover the expense on your behalf under this coverage.

Coverages Provided by Third-Party Car Insurance

The following is a list of the coverages provided by a Third-Party Car Insurance policy:

  • Third-Party Death/Disability Coverage

When a family member dies as a result of an accident, it is a tragic occurrence. While nothing will ever be able to fill the loss, as a car owner, you may at least provide reasonable recompense. This plan includes coverage for the death or disability of a third party.

  • Costs of Third-Party Treatment

Accidents can result in serious injuries that need medical care and costly therapies. Your Third-Party Car Insurance Policy will cover these expenses for you.

  • The automobile Owner's Legal Responsibilities

Accidents can lead to legal wrangling. Dealing with such disagreements will necessitate the assistance of a legal specialist. If the expenditure is stated in the policy terms, your insurance provider will cover it.

  • Accident Insurance for Individuals

With your standard Third-party insurance, you must purchase a separate Personal Accident Coverage. This is an accident insurance policy for the automobile owner, which is you. It provides up to Rs. 15 lakhs in death and disability compensation.

The Importance of Third-Party Automobile Insurance

Why do you need third-party automobile insurance? According to the Motors Tariff Act of 2002, every vehicle owner in India must obtain at least third-party auto insurance. When opposed to a complete plan, a third-party auto insurance policy provides the most basic coverage and is less expensive. Thus, in addition to being a legal necessity, having your vehicle/car insured by at least a third-party-only policy ensures that you have a minimal level of basic insurance coverage for your vehicle.

Take Away

According to the legal requirements of having a car, a third-party car insurance policy is a must-have. However, it is also true that relying solely on this basic plan would not protect you in the event of an automobile accident. As a result, a comprehensive plan called Comprehensive Policy is introduced, which includes both third-party and own-damage coverage (damage to your car). You may also personalize a comprehensive plan and take advantage of special offers and reductions on premiums. If you're seeking comprehensive coverage, go with a Comprehensive Car Insurance Plan.

Do read - What Are The Different Types Of Bajaj Allianz Car Insurance And How Do I Get One?

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.


Written by Saad Ahmad

Saad is a marketing guru and has some exciting knowledge to share about the motor and related industry. Read More


This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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