Third Party Car Insurance

Third Party Car Insurance

What is third party car insurance? Third-Party only car insurance policy is an insurance cover which insures you against all the third party legal liabilities which may arise due to any mishap such as a road accident involving your car. It provides coverage for bodily injury/death of a third party (as decided by a court of law) as well as third party property damage up to Rs. 7.5 lakh.

Importance of Third Party Car Insurance

Why do you need third party car insurance? As per the Motors Tariff Act 2002, it is mandatory for every vehicle owner in India to have at least a third party only car insurance policy. A third party car insurance policy provides the most basic coverage and is more affordable as compared to a comprehensive plan. Thus, besides being a mandatory requirement it is also essential to have your vehicle insured by at least a third party only cover so that you have a minimum of basic insurance coverage for your car.

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20042019
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What All Is Covered Under A Third-Party Car Cover?

  • Third Party Property Damage: All third party property damage are covered under the third party only cover up to Rs.7.5 lakh.
  • Third Party Death/Bodily Injury: Under a third-party plan, the insurer provides 100% compensation in case of death of a third party and 50% indemnification in case of partial blindness or loss of a limb. The compensation amount for third party liabilities is decided by a court of law.

What Is Not Covered Under A Third Party Car Insurance?

A third party car insurance policy does not provide coverage for own-damage sustained by a vehicle or its driver/owner. To get an insurance for own-damage of your car, you can purchase a comprehensive car insurance policy or standalone own-damage car insurance policy. Also, to insure yourself or the driver of your car you need to opt for a personal accident cover or paid driver cover, as the case may be.

Third Party Car Insurance Vs Comprehensive Car Insurance

Basis

Third Party Car Insurance

Comprehensive Car Insurance

Coverage

The third-party Car insurance plan offers compensation for injury/death of a third party( as decided by a court of law) and third party property damage (up to Rs 7.5 lakh).

Comprehensive car insurance policies offer compensation for damage caused to the insured vehicle as well as the injury/death of a third party. It also offers coverage up to a maximum cap of Rs 7.5 lakh in case of third party property damage.

Add-ons

No such add-on covers are available for purchase with the third-party policies.

A number of add-on covers such as Zero Depreciation Cover, Consumables Cover, etc. are offered along with a comprehensive car insurance policies against extra premium.

Cost

Third-Party policies are compared cheaper to comprehensive policies due to its limited coverage.

Comprehensive plans are comparatively costlier due to extensive coverage.

Add-ons For Your Car Insurance Policy

  • Zero Depreciation

    A car's value depreciates constantly with time. Thus, at the time of a claim settlement, the depreciated value of a car is deducted from the claim amount. However, by opting for a zero depreciation add-on you can shift the liability of the depreciation cost to the insurer and get the entire claim amount without any deduction of the depreciation sum. This add-on is generally available till the age of 5 years of car, however, the car age limit varies from insurer to insurer.

  • NCB Cover

    A No Claim Bonus (NCB) is a discount given by the insurer in the premium amount to a car insurance policy holder for not making a claim in the entire tenure of the four wheeler insurance policy. This discount is not available if the policy holder has made even a single claim. However, with the NCB cover, a policyholder will be entitled to receive an NCB discount despite having made a claim subject terms and conditions of insurance company. The NCB discount keeps on increasing with every claim-free year until it reaches 50%.

  • Engine Protection Cover

    A car's engine is by default not covered under either a comprehensive or a standalone own-damage car insurance policy. And therefore, if it gets damaged due water-logging or oil leakage, your insurance company is not liable to pay for its damages. But, if you opt for the add-on known as Engine Cover, you can get your car's engine insured by the insurer for damages incurred due to water ingression as well as leakage of lubricants. Engine Cover is one of the most popular car insurance add-ons and is available against the payment of a nominal premium.

  • Invoice Cover

    If you have a return to invoice cover added on to your comprehensive car insurance policy, you can claim the total ex-showroom price of your four wheeler, taxes and registration charges, in case of total loss. In case of total constructive loss (more than 70% of damage) or theft of your car, an insurance company pays the Insured Declared Value (IDV) of your car as compensation. However, this IDV is lesser than the actual amount paid by you at the time of purchasing your car. When you opt for the add-on called Return To Invoice Cover with your car insurance policy, the insurance company pays the total ex-showroom price of your car plus the taxes and registration charges incurred at the time of purchase, as the claim amount in case of total loss.

Third Party Car Insurance

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