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Third Party Car Insurance: Is It Mandatory in India?

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Being on the road can make you prone to many accident risks. Getting car insurance is best to protect yourself on the road. This is mandatory and legally required for the coverage. You must understand what third-party insurance is and why it is necessary.

Third-party liability is when the driver is responsible for causing damage to another person or their property. In such cases, third-party insurance ensures that the affected party receives proper compensation without any financial obligations to the driver. As the vehicle owner, you will not have to cover out-of-pocket expenses. The coverage may not protect your vehicle, but it protects you against legal and financial liabilities.

What Does Third-Party Car Insurance Cover?

The main comprehensive car insurance difference from third-party insurance is the coverage. The third party will get sufficient coverage through this policy, which can benefit you financially, especially in savings.

Below are the common types of TP car insurance coverage that you can consider:

• Personal Accident: Safety is one of the most important factors to consider when driving. Third-party car insurance is meant to offer you coverage in case you are involved in a car accident. The coverage is applicable for the treatment of personal injuries.

• Third-Party Liability: If you cause injury to a third party due to an accident, the policy will cover medical charges.

• Third-Party Property Damage: Apart from the third-party person, coverage for the damage will also be provided for property damage. If you collide with a third-party vehicle, the coverage for damages to it will be provided. However, the coverage will be applicable for up to 7.5 lakhs INR.

What is NOT Covered?

While there are many TP car insurance coverage options, there are specific exclusions, too. It is essential to keep an eye out for the exclusions when you file the claim. Below are the exclusions of the third-party car insurance include the following:

• Contractual Liability: If you have any contract for your car, it is advisable to check the coverage. Usually, contractual liabilities are not covered in the third-party insurance.

• War and Nuclear Risks: Wars can lead to extensive destruction, which can also damage a third party. However, damages due to war and nuclear risks aren't covered. Whether a third-party person or property suffers damages, it will not be covered.

• Limitations to use: It is also extremely important to check the limitations. Claims for damages due to racing and speed testing will not be covered.

Is it Legally Mandatory?

Yes, third-party car insurance is legally mandatory. The mandate is set up by the Motor Vehicle Act of 1988. If you are to drive your car on Indian roads, you must own third-party car insurance.

In case of any accident, you can get coverage for the damage if you have insurance. On the other hand, if you do not have insurance and are involved in an accident, you will have to pay a fine. You will have to pay a fine of INR 1000 and may be imprisoned for 3 months.

The insurance company also takes care of the legal escalations that may arise due to the accident. However, if you do not have insurance, you will have to take care of all the legalities, which can add unnecessary burdens.

Benefits of Having Third-Party Insurance

The benefits that third-party car insurance offers create a significant comprehensive car insurance. Some of the key benefits of third-party car insurance are as follows:

• Provides Legal Coverage: Third-party car insurance offers assistance for legal and financial aspects. In case of death or disability of the third party or damage to its property, the legal and financial components will be taken care of by the government. Therefore, the insurance protects the original driver or owner of the vehicle involved in these accidents.

• Peace of Mind: If you are involved in an accident in which the third party's property is severely damaged or the third party is injured, it can be a very traumatic situation. You will constantly worry about financial matters. Taking too much stress can eventually lead to more expenses. Thus, having third-party insurance provides peace of mind, protecting you from any stress that can arise due to such situations.

• Cost-effective: Third-party insurance is very cost-effective. You don't necessarily have to pay a high premium unless you opt for an add-on. The overall costs and financial premium can cater to your needs and determine effectiveness. If you calculate the evaluation, you will understand that it is far better than paying any unnecessary charges.

• Easy and Fast Process: Per the Motor Vehicle Act, you must have third-party car insurance. Therefore, you will have to buy or renew your expired policy for this purpose. Whether purchasing or renewing your expired policy, it can be highly efficient as the process is fast and convenient. You can avail yourself of third-party car insurance by applying online and getting it at your convenience.

• Quick Availability: One of the significant benefits of third-party car insurance is that it has quick availability. Therefore, you don't necessarily have to undergo an extensive process for renewal or purchase. You can easily buy it online due to its 24*7 availability. You can visit the insurer's online portal and purchase it anytime.

Limitations

While there are several benefits of third-party car insurance, there are specific limitations that you must know of, too. Some of the common ones are as follows:

• Less Coverage: Third-party car insurance has very narrow coverage. Therefore, the cost of repairs will be covered only by the third party, not you.

• No Add-ons: With third-party car insurance, you can't necessarily opt for any add-ons. Therefore, you cannot add extra coverages like personal accident cover, roadside assistance or Zero Depreciation.

• No Claims for Natural Calamities: Third-party car insurance does not provide coverage for natural disasters. Therefore, if you live in a natural calamity-prone area like floods or earthquakes, you cannot file for a claim in case of damage.

• Complex Claim: Claiming coverage for third-party car insurance is slightly complex. You will have to provide complete proof for whatever you are filing to get the claim settled.

When is it Sufficient?

A third-party car insurance is sufficient if you are involved in an accident where a third party or their property (vehicle) has been damaged. It is only suitable for third parties and is a mandate by law, protecting you against any significant financial or legal troubles.

You can connect with your insurance advisor to guide you through the process of applying. If you are not going through any insurance agent, you can also apply for the third-party insurance online. This allows for immediate coverage and extra protection. More information about third-party car insurance and its adequacy is available on our car insurance page.

Conclusion

Now that you know what third-party insurance is, you should get it. The primary purpose of the insurance is to provide medical or financial coverage for the third party. It also protects the vehicle owner against any unwanted legal and economic troubles. You should get your vehicle insured, along with third-party coverage. Being involved in any accident or such incident can be stressful. Therefore, third-party insurance can be a major saviour in situations like these.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

Related Blogs:

• Pros & Cons For Choosing Third Party Cover

• Know the Difference Between Own Damage and Third Party Car Insurance

• Debunking Common Misconceptions about Third-Party Car Insurance

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