Third-party Insurance

Third-party Insurance

Third-party car insurance covers third-party related liabilities incurred due to an accident from an insured vehicle. This insurance gives compensation in case of death, injury, or damages caused to a third party.

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3 mins
25-July-2023

As per the Motor Vehicles Act 1988, every four-wheeler owner in India needs to buy a third-party car insurance policy. It covers only third-party liabilities. Car insurance holders get coverage if any loss or damage caused to the property or life of any third party.

What is third-party insurance?

Third-party car insurance is a basic motor insurance policy that every four-wheeler owner must have. It financially covers the policyholder against any losses or damages caused to a third party’s property or if the person suffers physical injury or death. The Motor Vehicles Act of 1988, also mandates buying third-party policy at the time of purchasing a new vehicle.

Key features of third-party car insurance

Here’s a quick look at the key features of third-party insurance.

Key features

Description

Liability coverage

Covers damage or injury caused to a third party.

Legal protection

Offers legal assistance in case of a legal dispute.

Property damage coverage

Covers repairing cost of someone else's property.

Personal accident coverage

Provides financial coverage for injuries or death of the policyholder.

Third-party injury coverage

Covers medical expenses for injuries sustained by a third party.


Key benefits of third-party car insurance

Here’s a list of top benefits of a third-party insurance for car.

• Coverage for third-party liabilities

Get financial coverage if any damage, death, or loss caused to a third party due to any mishap or accident.

• Affordable premium

Third-party insurance policies are usually available at a low monthly premium. This ensures you have the insurance coverage you need for your vehicle without having to spend a huge amount of money.

• Peace of mind

A third-party car insurance policy ensures peace of mind. As it provides financial coverage against any accident or mishap that might involve a third party.

• Easy online process

You can purchase a third-party insurance policy online with zero paperwork in just a few clicks.

Third-party insurance premium rates

The Insurance Regulatory and Development Authority of India fixes the third-party car insurance premium based on the engine’s cubic capacity (CC). Premiums for these policies are generally lower than the comprehensive car insurance policies.

Following are the premiums set for third-party insurance policies for old, new, and electric cars.

Third-party car insurance premiums for the old cars

Cars with engine CC

Premiums

Up to 1,000 CC

Rs. 2,094

1,000-1,500 CC

Rs. 3,416

More than 1,500 CC

Rs. 7,897


Single premiums set for three years third-party car insurance policies

Cars with engine CC

Premiums

Up to 1,000 CC

Rs. 6,521

1,000-1,500 CC

Rs. 10,640

More than 1,500 CC

Rs. 24,596


Single premiums set for three years third-party insurance policies for electric vehicles

Cars with engine CC

Premiums

Up to 30 KW

Rs. 5,543

30–65 KW

Rs. 9,044

More than 65 KW

Rs. 24,907

Inclusions of a third-party car insurance policy

Below are some key inclusions under a third-party insurance:

• Accidental damage to third-party property

A third-party motor insurance policy covers damages caused to a third-party vehicle or property in an accident.

• Accidental injury to or death of a third party

A standalone third-party insurance plan also covers any injury caused to the third party or the person dies in the accident.

Exclusions of a third-party car insurance policy

Below are some key exclusions under a third-party car insurance:

  • Injuries or death of the owner or driver of the car
  • Any damage caused to the policyholder’s car due to theft, fire, or an accident
  • Any accident occurred when the driver was under the influence of alcohol or any other substance
  • Insured vehicle used for commercial purpose
  • If anyone drives the car without a valid license or on the wrong side

Comprehensive vs third-party car insurance policies

Below are the major differences between comprehensive and third-party insurance for car.

Feature

Comprehensive car insurance

Third-party car insurance

Coverage

Covers damages caused to the insured vehicle and third-party liabilities. Third-party liabilities include damage to the property or injury or death of a third party.

Covers the policyholder only against third-party liabilities. Third-party liabilities include damages caused to the third party’s vehicle or property, or any physical injury caused to them in an accident.

Add-ons

Flexibility to add add-on covers. You can add consumable cover, engine protection cover, zero depreciation cover, or roadside assistance cover. Also, NCB protection cover, key replacement cover, and more to the basic car insurance policy.

There are no additional covers available on third-party car insurance policies.

Cost

As comprehensive car insurance offers an extensive coverage, the premium comes at a comparatively higher price.

These policies are relatively cheaper than comprehensive plans due to restricted coverage.


Why should you buy third-party car insurance policy?

Having a third-party insurance policy is always beneficial. The policy covers you in case of any unfortunate eventuality.

Financially beneficial:

Third-party car insurance online will protect you from heavy fines and damage costs of a third party.

Cost-effective:

Third-party insurance is cost-effective and provides long-term benefits compared to other plans.

Licence protection:

Third-party car insurance safeguards against the seizure of a driving licence.

Legal protection:

Third-party car insurance online saves policyholders from time-consuming legal hassles.

Safety net:

Third-party insurance provides a personal accident cover of up to Rs. 15 lakh.

How to buy a third-party car insurance online?

You can simply buy a third-party insurance for car online in just a few steps.

  • Visit the preferred insurance company’s website.
  • Search for third-party car insurance policies and fill the application form.
  • You need to share a few personal details like name, mobile number, and residential address.
  • Also, provide details about your vehicle.
  • Carefully go through the details entered and submit.
  • Make the payment through any of your preferred online payment modes.

How to renew third-party car insurance online?

Simply visit your insurer’s website to renew your third-party insurance online. Enter the details of your previous car insurance policy and make the payment to get the policy instantly. You will receive the renewed third-party insurance documents on your registered mail.

If you wish to change the insurer, you can visit your preferred insurance company’s website. Search for third-party insurance and apply online. Here too, you need to fill in some personal details and your previous policy number. Make the payment online and get your policy.

How to raise a claim request for third-party car insurance

It is quite easy to file a claim against your third-party car insurance policy. Here are the steps to follow:

Step 1: Inform the insurer about the accident that involves third-party loss or damage.

Step 2: Provide all necessary details about the accident to the insurance provider. Give details like time and place of the mishap, eyewitness. Also, photos of the incident, details of the policyholder and the insurance policy and others.

Step 3: The insurance provider will verify all details as well as the documents provided and settle the claim with the third party.

Check out some other related motor insurance articles:

Own damage Car Insurance

Car depreciation calculator

Zero dep car insurance

Roadside assistance cover for car

IDV calculator

Documents required for car insurance claim process

Bumper-to-bumper car insurance

Engine protection cover

First-party car insurance

Auto rickshaw insurance

Pay as you drive car insurance

Renew expired car insurance

Frequently asked questions

What is a third-party insurance for car?

A third-party insurance for car keeps you financially secure against third-party liabilities. You get coverage against any damages caused to the third party because of an accident where you are at fault. Covers the damages caused to the third party’s property or vehicle. Also, if injured or caused death to the third party in the accident. Third-party car insurance policy also covers the legal expenses incurred, if any.

What is the sum insured on third-party insurance?

Third-party insurance gives coverage up to Rs. 7.5 lakh. The third party gets the compensation against any damages caused to their property or vehicle, injury, or death suffered in an accident. The third-party car insurance holder files the claim for the accident caused from his/her car.

Is third-party insurance mandatory for cars?

Yes. The Motor Vehicles Act mandates every vehicle owner to have a third-party car insurance policy. If you drive without a valid third-party car insurance policy, you may legal consequences.

Is third-party insurance enough for my car?

An online third-party insurance covers only third-party liability. Covers the accidental damages or bodily injury caused to the third party. Third-party car insurance does not cover damages caused to the policyholder’s car. The policyholder will have to pay the repairing cost for the car damages from their pocket.
A comprehensive car insurance policy covers both own damages and third-party liabilities. You also get personal accident cover.

Which is better first-party or third-party insurance?

First-party car insurance refers to comprehensive car insurance policy that offers coverage for both own damages and third-party liabilities. A third-party insurance covers only the third-party liabilities. You can choose any type of the car insurance policies as per your requirement and budget.

Does third-party insurance cover death?

Yes, third-party insurance covers injury or death of third party. The third party gets compensation up to Rs. 7.5 lakh based on the damages incurred.

Can we drive a car just with a third-party insurance?

Yes, you can drive a car on Indian roads just with a third-party insurance. Every vehicle owner must have a third-party car insurance to comply the law as per the Motor Vehicles Act. If caught driving a car without a valid third-party insurance, you may have to pay a fine of Rs. 2,000. In some cases, your driving licence may get confiscated.
To avoid such consequences, you can buy/renew a third-party car insurance online.

Can I cancel the third-party car insurance policy?

Yes, you can cancel your third-party car insurance policy at any time by contacting your insurance provider and informing them of your decision. However, note that cancelling your policy before its expiry date may result in a cancellation fee or other charges. So, check with your provider first if there are any such charges before you proceed.

What should I do in case of an accident covered under my third-party car insurance?

In case of an accident covered by your third-party car insurance, you should immediately report the incident to your insurance provider. Depending on the severity of the accident, you may also need to obtain medical help, file a police report, and take photos of the damage. Your insurance provider will then assess the situation and guide you on the next steps.

What is the policy term of a third-party policy?

The policy term of a third-party car insurance policy varies depending on the chosen policy and the terms and conditions set by your insurance provider. Generally, insurance policies can last anywhere from twelve months to three years. You also get insurance policies for a short term. Check with your provider for the exact duration of your policy.

Will third-party insurance cover the damages if someone else was driving my car and got into an accident?

Mostly, third-party insurance covers the damages and expenses caused to the third party if the person driving is at fault. You should ensure that you have named drivers on your policy. Also, ensure that the policy covers the person driving your car at the time of the accident, before making a claim. If the policy does not cover the person driving your car, the chances of the insurance company not covering the damages are likely. However, the scope of coverage may vary depending on the insurer’s terms and conditions.

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Insurance is the subject matter of solicitation. *T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, ICICI Lombard General Insurance Company Limited, HDFC ERGO General Insurance Company Limited, Tata AIG General Insurance Company Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited, Manipal Cigna Health Insurance Company Limited and Care Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also a distributor of other third party products from Assistance Services providers such as CPP Assistance Services Pvt. Ltd., Bajaj Finserv Health Ltd. etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective Assistance service provider company.

Note – While we have made all efforts and taken utmost care in gathering precise information about the products, features, benefits, etc. However, BFL cannot be held liable for any direct or indirect damage/loss. We request our customers to conduct their research about these products and refer to the respective product’s sales brochures before concluding their sale.