Third party car insurance policy is a type of insurance coverage that provides financial protection to the policyholder against damages caused to third-party vehicles or property. It is a mandatory requirement by law in many countries to have at least third-party car insurance before driving on public roads. In this article, we will discuss everything you need to know about third party car insurance policy.
What is Third Party Car Insurance Policy?
A third-party auto insurance policy is a type of auto insurance that covers losses or damages to a third party’s vehicle or property as a result of an accident the policyholder caused. The policy does not give any coverage for the policyholder’s own car or injuries; rather, it only covers the policyholder’s legal obligations to the third party.
Coverage of Third Party Car Insurance Policy
The following are the coverages provided by a third-party car insurance policy:
Third-party liability coverage: It covers damages or losses caused to third-party property or vehicles due to an accident caused by the policyholder.
Personal accident coverage: It covers the policyholder’s legal liabilities towards third-party bodily injuries or death caused due to an accident caused by the policyholder.
Legal coverage: It covers legal expenses incurred by the policyholder in case of a lawsuit filed by the third party against the policyholder.
Benefits of Third Party Car Insurance Policy
Legal compliance: In many countries, it is mandatory to have at least third-party car insurance before driving on public roads. Hence, it ensures legal compliance.
Financial protection: It provides financial protection to the policyholder against legal liabilities towards third-party damages or losses.
Affordable premiums: Third-party car insurance premiums are generally lower than comprehensive or collision coverage, making it an affordable option for policyholders.
Limitations of Third Party Car Insurance Policy
Limited coverage: Third-party car insurance provides coverage only for damages or losses caused to third-party property or vehicles and does not cover any damages or injuries to the policyholder or their own vehicle.
No add-ons: Third-party car insurance policy does not come with any add-ons such as zero depreciation or engine protection, which are available in comprehensive or collision coverage.
Exclusions: There are certain exclusions to the policy, such as damages caused due to driving under the influence of alcohol or drugs, or if the policyholder does not have a valid driving license.
Cost of Third Party Car Insurance Policy
The cost of a third-party car insurance policy depends on various factors such as the type and model of the vehicle, the age and driving history of the policyholder, and the location of the vehicle. Generally, third-party car insurance premiums are lower than comprehensive or collision coverage, making it an affordable option for policyholders.
How to Purchase Third Party Car Insurance Policy
Third-party car insurance policy can be purchased from any insurance provider or online insurance aggregator. The policyholder needs to provide details such as vehicle registration number, personal details, and contact information to purchase the policy. The policy can be purchased for a period of one year or more, and the premium can be paid in one lump sum or through installments.
Claim Process for Third Party Car Insurance Policy
In case of an accident, the policyholder needs to inform the insurance provider immediately and file a claim. The insurance provider will then investigate the claim and verify the details. Once the claim is approved, the insurance provider will settle the claim amount directly to the third party or their representative. The policyholder may need to pay the deductible amount, if any, before the claim is settled.
Renewal of Third Party Car Insurance Policy
Third-party car insurance policy needs to be renewed annually or as per the policy terms and conditions. The policyholder needs to pay the renewal premium to continue the coverage. It is recommended to renew the policy before the expiry date to avoid any lapse in coverage.
Differences Between Third Party Car Insurance Policy and Comprehensive Car Insurance Policy
While third-party car insurance policy provides coverage for damages or losses caused to third-party property or vehicles, comprehensive car insurance policy provides coverage for both third-party damages and losses and damages or losses to the policyholder’s own vehicle or injuries. Comprehensive car insurance policy also comes with add-ons such as zero depreciation, engine protection, and roadside assistance, which are not available in third-party car insurance policy. The premiums for comprehensive car insurance policy are generally higher than third-party car insurance policy.
Exclusions in Third Party Car Insurance Policy
While third-party car insurance policy provides coverage for damages or losses caused to third-party property or vehicles due to an accident caused by the policyholder, there are certain exclusions to the policy. The policy does not provide coverage for damages or losses caused due to driving under the influence of alcohol or drugs, or if the policyholder does not have a valid driving license. The policy also does not provide coverage for damages or losses caused due to intentional acts or criminal activities by the policyholder.
Benefits of Adding Personal Accident Cover to Third Party Car Insurance Policy
Personal accident cover can be added to the third-party car insurance policy to provide coverage for the policyholder’s own injuries or death caused due to an accident. It provides financial support to the policyholder and their family in case of a mishap. The premium for personal accident cover is generally nominal and can be added to the third-party car insurance policy at the time of purchase or renewal.
Conclusion
In conclusion, third-party car insurance policy is a mandatory requirement by law in many countries and provides financial protection to the policyholder against legal liabilities towards third-party damages or losses. While it is an affordable option, it has limited coverage and does not come with any add-ons. Therefore, it is important to choose a car insurance policy that best suits your needs and provides adequate coverage.
