Things to Know about Third-party Motor Insurance
Third-party motor insurance is known as the ‘act-only’ insurance which is mandatory for all vehicle owners as per the motor vehicle act. Third- party insurance safeguards the damages occured to the third-party vehicle, personal injury or personal property. During any accident, the policy provides financial assistance to the policyholder to pay for the cost of repairs to the third-party property. The third-party insurance does not cover your individual protection in case of an accident with the third-party. Read the below article to know about third-party motor insurance.
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Third-party insurance is sometimes known as act-only insurance which is a compulsory requirement for all vehicle owners as per the Motor Vehicle Act. It is a type of insurance cover where the insurance company offers protection against damages occurring to the third-party vehicle, personal property and physical injury. The policy does not offer any benefits or reimbursement to the owner of the car.
Working of a Third-Party Car Insurance
If the policyholder, unfortunately, meets with an accident, then the insurance company offers financial assistance to pay for the cost of repairs to the third-party property or injuries. Thus, it lowers the financial burden for the policyholder. In the case of an accident, the policyholder must inform the insurance company about it immediately before filing for a claim.
When the claim is filed, the insurer appoints a person surveying the damages to the car and verifies the estimated cost of repairs. Once the verification is completed, the company settles the claims.
The first step in understanding the working of a third-party insurance cover is to make a note of the basic terminologies used. The commonly used term associated with third-party cover is below-mentioned-
First party: Policyholder or person who has bought the insurance policy.
Second-party: Insurer or insurance company.
Third-party: Claimant who raises a claim for the damages caused by the first party.
If the policyholder is involved in an accident with a third party, then the policyholder pays for damages or injuries caused. When an accident occurs, the policyholder must inform the company as early as possible along with the following details-
- Description of the accident along with accurate date and time.
- Details of the policyholder present during the accident.
- Describe the injuries sustained by driver, passengers, and/or property or vehicle damage.
- Details of the witnesses present.
- Weather and visibility condition at the time of the accident.
- Pictures of the evidence collected from the accident site.
Importance of Third-party Insurance
The importance of third-party insurance is as follows-
- Third-party insurance is a compulsory requirement by law. So, having third-party insurance cover allows the policyholder to cooperate with the legal obligation.
- Being a basic coverage option, it gives the policyholders the acknowledgment of having sufficient financial protection against the damage they may cause to other people in an accident.
- Third-party motor insurance secures the policy holder’s financial expenses against accidental risks.
Features of Third Party Insurance
The third-party insurance offers the following key benefits to its policyholders-
- Third-party insurance provides a basic level of protection to all policyholders.
- It is also known as the liability-only or act-only policy.
- It offers protection against the legal liability occurring to a third party that may arise due to the policyholder's presence in the accident. It reimburses for the personal injury, loss of life, and property damage to the third-party.
- A noteworthy feature of third-party insurance is that it has an affordable premium and high coverage.
- Third-party insurance does not offer any financial protection to the insured or the car of the policyholder.
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.