Third-party Insurance is made mandatory by the Motor Vehicles Act in India. This makes it very important to understand what it stands for and how it can prove helpful to us. But before knowing what the benefit of third party insurance is, it is necessary to understand what the first party, second party, and third party.
is the owner of the vehicle who purchases the policy. He is liable to make sure that the vehicle he is driving has a valid third-party liability insurance policy.
is the insurance company that offers various insurance policies to the policyholders and pays for their liabilities on occurrence or non-occurrence of an event for which insurance is taken. They are the ones who honor the claims.
is the person with whom the accident has taken place, and the owner is liable to pay for the damages. The insurance is taken for this person. His medical and vehicle damage costs are covered under this insurance.
If the policyholder meets with an accident, it is his duty to inform the insurance company as soon as possible. Though there is no such rule, the insurance company may deny the claim on the basis of delayed filing; significant time has elapsed from the occurrence of the event, and no valid reason for the delay in filing the claim is made available to the insurance company. Other than that, it is a contract where the insurance company shall provide financial assistance in regards to the cost of repairs after an accident has taken place.
Feature of third-party insurance policy
What is the benefit of third party insurance?
- The third-party policy is the most basic types of motor insurance policy available. There are other superior policies available in the market with more coverage offered.
- Third party car insurance / bike insurance covers damages that are suffered by the third-party and his vehicle, and it pays for the same within the limits of the sum insured.
- There is no protection offered to the insured person himself or his vehicle. As the name suggests, it only covers third-party liabilities.
- Just like any other insurance contract, a third-party liability contract is also a contract of indemnity. It means it only makes good the loss suffered by you. You will not be benefitted from it in any way.
- As it is the most basic kind of contract, the premium amount is also minimal. Though the premium amount also depends on the sum insured, the premium amount will be on the lower side when compared to other policies offered with a similar sum insured.
Under what circumstances will the claim not be accepted?
- The most crucial benefit of third party insurance is that it helps you comply with legal provisions. This is of utmost importance as non-compliance can lead to many other issues.
- A financial benefit of third party insurance is that it offers a cover on the financial risk associated with an unforeseen event which can possibly have a more significant impact on your financial plans.
- This insurance can help you achieve peace of mind and gives you a feeling of being safe and protected. This psychological benefit of third party insurance may not be thought of but is equally important.
Frequently Asked Questions
What is the process to receive the claim under a third-party insurance policy?
- If the driver was driving under the influence of alcohol
- If the driver does not have a valid driving license
- If the accident is concluded to be made on purpose and was not merely an accident
- If the vehicle is found to be used for illegal purposes
- If the vehicle is stolen, third-party insurance will not be activated as there is no third-party damage being done.
First of all, you need to inform the insurance company about the happening of an accident along with FIR. After that, the insurance company will appoint a surveyor who will examine the situation and assure that the claim is genuine and not just an attempt to get the money. After the surveyor files the report, you will receive a settlement from the insurance company.
Can we file the claim more than once under a third-party insurance policy?
No, you cannot file a claim for the same damage more than once under the given insurance policy.
Are there any differences in inclusions and premium amount if we buy car insurance online?
No, there are no differences if you buy car insurance online
or offline. It is a matter of choice.
What are all documents required to claim under a third-party insurance policy?
There is a list of documents that are necessary for filing a claim depending on your insurance provider. Though it generally includes a document stating the description of the event that happened, date and time of the event, details of insurance and policyholders, type of injuries suffered, type of damages suffered by the third-party vehicle, name, and other information of witnesses to the event among others.