What is third-party car insurance?
Third-party insurance is a form of liability insurance purchased by an insured from an insurer for protection against the claims of a third-party. It is mandatory by law to have at least third-party insurance under the Motor Vehicles Act.
Who should buy third-party insurance?
There are two types of car insurance available in the market: third-party insurance and comprehensive insurance. Most people choose to buy the comprehensive policy as it provides all-round coverage, including third party and own damage expenses, as well as provides add-on covers. Usually people opt for comprehensive policy for the first five years of buying a car. This is the period of a clearly defined Insured Declared Value (IDV) for your vehicle. But you may realise with time, that as the car gets older it is not quite worth the hefty amount of premiums to pay every year for the comprehensive policy. This is when you can opt for the third-party insurance policy, which covers the basic requirements. If you think you do not want to keep paying hefty premiums for that occasional scratch or breakdown that occurs once in a blue moon, then you should opt for third-party policy. It will keep you covered for the compensation of the damage caused to a third party by your vehicle.
What does third-party insurance cover?
A third-party insurance covers for the expenses incurred as a result of the following reasons-
- Damages to a third party vehicle
- Damage caused to a third party property
- Injuries caused to other people in an accident
What are the benefits of third-party insurance?
- Legal and Financial Assistance
- Provides Peace of Mind
- Easy and Fast Procedure
- Easy Round the Clock Availability
- Cost-Effective
- Beneficial in Any Unforeseen Events
What does third-party insurance not cover?
- Cost of damages to a vehicle or the belongings in the vehicle in case of an accident
- Cover for losses incurred if your car or belongings are stolen or destroyed
- Coverage against damages to your own vehicle
- Pay out for replacement if your car is written off
- Cover for injuries you suffer in an accident
While comprehensive policy provides better coverage for your car’s losses, it may still not be something you need. This depends on the usage of your car, and age of the car. Some old inexpensive models of car are cheaper to get repaired at a garage by yourself, rather than having to pay insurance premiums for it. Thus, it is up to the driver/owner of the car to make the right decision regarding which type of insurance policy would suit best with the car they use, and the circumstances of the car’s usage, though you cannot drive without one, as it is punishable by law. Companies like Bharti AXA provide insurance policies with some of the best deals.
