The Motor Vehicles Act of 1988 in India makes it mandatory for every car owner to buy a third-party car insurance policy. When you start looking for insurance for a four-wheeler, you have two options to choose from – 3rd Party Car Insurance and comprehensive car insurance. While you can choose between them based on your needs, it is important to remember that it is illegal to drive your car in India without active third-party insurance for four-wheelers. In this article, we will talk about third-party four-wheeler insurance and discuss things that you need to know before buying one.
What is third-party car insurance?
Driving a car is a responsible task. If your car causes an accident or mishap and damages the property of a third party or causes injuries to a third party person, then you are legally liable to pay for the costs of repair to the damaged property and/or treatment costs to the injured person. Additionally, you might have to pay compensation to the third party based on the severity and extent of the damage caused. Managing these expenses can dent your finances.
A third-party car insurance policy offers coverage for all such expenses. If you have active insurance for your car for the third party, then the insurer manages all the costs associated with any third-party damage caused by the insured car.
Who should purchase third-party car insurance?
Every car needs a third-party liability cover. When you start looking for motor insurance online, you can either opt for the standalone third-party liability-only car insurance policy or the comprehensive car insurance policy that includes third-party liability and damages to the insured vehicle.
If you are looking to buy car insurance only to adhere to the mandatory requirements or if your car does not need comprehensive cover, then you can purchase a third-party car insurance policy.
The premium of third-party car insurance is determined by the Insurance Regulatory and Development Authority of India (IRDAI) based on the engine capacity (cc) of the car. On the other hand, the premium of a comprehensive policy is ascertained by factoring in a range of aspects like the make and model of the car, its age, deductibles, add-on covers, etc. Hence, buying a third-party policy is more affordable, making it a good option for car owners looking for a cost-efficient insurance plan.
Inclusions and Exclusions of Third-party Car Insurance
Here are the inclusions of third-party car insurance:
- Cost of repair of damages caused to third-party vehicles due to an accident involving the insured car
- Medical treatment expenses for injuries sustained by a third-party person due to an accident involving the insured car
- Compensation that you might have to pay due to injuries caused or the death of a third-party person
Here are the exclusions of third-party car insurance:
- If the insured car gets damaged in the accident, then the policy does not offer coverage
- No coverage for damages to the insured car due to natural or man-made calamities or theft of the vehicle
How to Buy a Third-party Car Online Insurance?
All car insurance providers offer a third-party liability policy since it is a mandatory requirement. The IRDAI determines the premium of these policies. Hence, there is not much to choose from regarding the insurance plan’s cost. However, you can look at the quality of service offered and read reviews before signing the dotted line.
While third-party car insurance is a legal requirement, it is important to remember that it does not offer coverage for damages to your car. Therefore, a comprehensive policy is a better option if you are looking for a policy that offers complete protection. On the other hand, if you are looking to fulfil the mandatory requirement and believe that managing your car’s repair costs would be cheaper than paying the insurance premium, then you can consider buying third-party car insurance.