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Things to Know About Liability-Only Car Insurance Policy

Published On Feb 20, 2021, Updated On Mar 16, 2021

Liability-Only Policy is compulsory as per the Indian Motor Tariff.. This policy covers the policyholder’s liability towards a third-party who has been caught up in the accident caused by the insured’s car. However, under this a kind of car insurance insured and the vehicle is not protected.

As per the Indian Motor Tariff, all cars are compulsorily required to have at least a third-party car insurance plan. It provides coverage for the liabilities incurred by the policyholder towards a third party in an accident caused by the insured’s car. It is therefore also known as a third-party car insurance plan.

Things to Know About Liability-Only Car Insurance Policy

Inclusions Covered Under the Liability-Only Car Insurance Policy

It is mandatory for all car owners to buy a third-party car insurance policy. Under the third party car insurance policy the inclusions that are covered are mentioned below:

  • Third-Party Injuries

The treatment cost of the injury caused to a third party is covered under the liability-only car insurance policy. Injuries of all types are covered and the medical bills for the injured are paid by the Car insurance company on behalf of the policyholder.

  • Covers Disabilities

The plan also provides coverage for a partial or permanent total disability caused to the third party in the accident caused by the insured’s car.

  • Death Compensation

The death of a third party is also covered under a liability-only car insurance policy. The compensation in such cases is decided by a court of law.

  • Property Damage

The policy provides compensation up to Rs. 7.5 Lakh for the property damage incurred by the third party in an accident involving the insured’s car.

Advantages of the Liability-Only Car Insurance Policy

Third-party car insurance helps them to enjoy expert financial protection in the event of damages caused to a person or property. The other benefits of this policy are -

  1. Helps To Remain Legally Compliant

The absence of at least a valid third party car insurance plan is a punishable offence which can attract a fine of Rs. 2,000 and/or imprisonment of up to 3 months. Thus, by owning a liability-only plan, you can keep yourself legally compliant and save yourself from legal troubles.

  1. Complete Peace of Mind

A liability-only car insurance policy keeps you shielded against all third party liabilities including bodily injuries, partial/total liabilities, death as well as property damage of the third party. Thus, it helps you enjoy a substantial amount of peace of mind.

  1. Affordable

Third-party liability insurance is inexpensive compared to a comprehensive car insurance as it does not cover the vehicle’s own damages. The premium of a liability-only plan is fixed by IRDAI and depends on the engine capacity of the cars.

Also, Read

What To Do If your Car Catches Fire?

Benefits of Multi-Year Car Insurance in the Long Run


The liability-only car insurance policy is a cheap and affordable policy that covers the damage and death of the third party on the road if caused by the insured. It fulfills the legal responsibility of the regulatory authorities in India but it does not cover its vehicle damage unless additional riders are included with the plan by the policy owner.

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.

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