Automobile

What Does Third-party Car Insurance Cover?

As per the Motor Vehicles Act of 1988, all car owners must have a third-party liability insurance cover. As the name suggests, a 3rd Party Car Insurance Policy offers protection from damages caused by your car to a third-party person or property.

Most insurers like Tata AIG offer two broad categories of car insurance policies – third-party insurance covers and comprehensive car insurance. Since the law mandates a minimum of third-party coverage, many car owners opt for the same. If you choose to, you can easily purchase third-party car insurance online from Tata AIG.

So, what is a third-party cover in car insurance? What are its inclusions and exclusions? Let’s find out.

Understanding Third-party Car Insurance

If your car gets into an accident or mishap and injures a third-party person or causes damage to third-party property, then you are liable to pay for the caused damages. A third-party four-wheeler insurance policy offers financial and legal protection from such damages. This is a mandatory cover for all cars in India. If you are caught driving your car without valid third-party insurance, then you can be fined and even have to face prison time.

What Does a Third-party Car Insurance Policy Cover?

A third-party car insurance policy is a standard policy offering the following coverage:

  • Injury or death of a third-party person

Let’s say that you are driving your car and accidentally crash into a parked car. In the accident, apart from the damage to both the cars, the person sitting in the parked car gets injured. In such cases, you are legally bound to bear the cost of treatment of the third-party person, including hospitalisation if needed. Further, if the person succumbs to the injuries, then you are liable to pay compensation to the family. A third-party car insurance policy offers financial and legal protection in such cases.

  • Damage to a third-party property

Continuing the example cited above, if nobody gets injured, but the parked vehicle gets damaged, then you are liable to pay for the repair of the vehicle. A third-party car insurance policy offers protection from such costs too.

  • Personal accident cover for the owner-driver

The law also mandates all car owners to have a personal accident cover of ₹15 lakhs for the owner-driver of a car. This is available for an affordable premium. If the owner-driver gets injured during an accident, then this ensures that the costs associated with the treatment and hospitalisation of the owner-driver, are covered. It also offers compensation to the nominee of the owner-driver if he succumbs to the injuries.

What Does a Third-party Car Insurance Policy NOT Cover?

Here are the exclusions of a third-party car insurance policy

  • If your car gets damaged in an accident, then the third-party policy will not offer coverage.
  • You are required to carry a valid licence with you whenever you drive your car. If you meet with an accident but are not in possession of a valid licence, then the insurer will not offer coverage for third-party damages.
  • Meeting with an accident while driving under the influence of any narcotic substance or alcohol will also result in the rejection of a third-party claim on your policy.
  • The insurer specifies the geographical limits of the coverage. If you meet with an accident outside the prescribed geographical limits, then the policy will not offer coverage.
  • Damages caused to a third party by your car in a war-like situation are not covered under these policies.

What is The Premium of a Third-party Car Insurance Policy?

The IRDAI (Insurance Regulatory and Development Authority of India) determines the premium of a third-party car insurance policy in India. This is done based on the engine displacement of the car. Here are the existing premium rates of a third-party car insurance policy in India:

  • If the car’s engine capacity is less than 1000-cc, then the annual premium is ₹2072.
  • If the engine capacity is more than 1000-cc but less than 1500-cc, then the premium is ₹3221.
  • For cars having an engine capacity of more than 1500-cc, the third-party car insurance premium is ₹7890.

Summing Up

As you can see, a third-party car insurance policy offers coverage for damages to third-party property or injuries or death of a third-party person caused due to an accident involving your car. While the coverage is similar across insurers, make sure that you go through the policy document before buying. Good Luck and drive safe!

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