Third-Party Car Insurance

Know about the key features, benefits, claim process, and coverage details of third-party car insurance policy

3 Mins
01 Feb 2023

As per the Motor Vehicles Act 1988, every four-wheeler owner in India needs to buy a third-party car insurance policy mandatorily. It offers financial coverage to owners against any liabilities that can arise due to losses and damage caused to the property or life of any third party.

What is third-party insurance?

Third-party car insurance is a type of motor insurance that offers a cover against any financial liabilities that might come into effect due to an accident while riding your vehicle. However, in case of damage caused to the insured individual or the vehicle, there will not be any coverage available.

In case of an accident causing injury or damage to a third party, details of the incidents must be reported to the insurer. The insurer checks and verifies the claim and settles it with the third party. 

Key features and benefits of third-party car insurance

  • Coverage for third-party liabilities

    Insurers can get financial protection in the event of any damage, death or loss caused to a third party due to any mishap or accident. 

  • Affordable premium

    Third-party car 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 by providing financial coverage in the event of any accident or mishap that might involve a third party. 

  • Easy online process

    You can purchase a third-party car insurance policy online with zero paperwork and just a few clicks from the comfort of your home.

Inclusions of a third-party car insurance policy

  • Accidental damage to third-party property

    A third-party motor insurance policy provides financial protection against damages to a third-party vehicle or property involved in an accident.

  • Accidental injury to or death of a third party

    A standalone third-party car insurance plan will also cover any liability that might come up due to the injury or death of a third party caused by the policyholder’s car.

Exclusions of a third-party car insurance policy

  • 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 that was caused when the driver was under the influence of alcohol or any other substance
  • The insured vehicle was used for commercial purpose
  • In case the driver drove the insured car without a valid license or on the wrong side

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: Share all necessary details about the accident with the insurer. This will include the time and place of the mishap, eyewitnesses, 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.

Why should you Buy Third-party Car Insurance

It is always beneficial to have a third-party car insurance policy in place in case of any unfortunate eventuality. Third-party Insurance provides an additional layer of protection to your existing Auto Insurance and covers unforeseen expenses in the future.

Financially beneficial:

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


Third-Party Car Insurance is cost-effective and provides long-term benefits compared to other plans.

Licence Protection:

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

Legal Protection:

Third-Party Car Insurance saves policyholders from time-consuming legal hassles.

Safety Net:

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

Why choose Bajaj Finance for Third-party Car Insurance?

Bajaj Finance offers car insurance plans from top insurance providers. Some of the advantages of purchasing car insurance policies from Bajaj Finance are:

  • No documentation required

    You can purchase comprehensive and third-party car insurance plan from Bajaj Finance conveniently without any paperwork.

  • Wide network of registered garages

    The insurance partners of Bajaj Finance offer a wide network of 4,500+ garages spread across the country. You can get the convenience of cashless car repairs at any of these garages.

Third-party insurance premium rates

The Insurance Regulatory and Development Authority of India fixes the third-party car insurance premium based on the engine CC. The premiums predetermined for the third-party insurance 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 insurance premiums for the old cars

Cars with engine CC


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


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


Up to 30 KW

Rs. 5,543

30 – 65 KW

Rs. 9,044

More than 65 KW

Rs. 24,907

Comprehensive vs third-party car insurance policies

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


Comprehensive car insurance

Third-party car insurance


Covers expenses for the damages caused to the insured vehicle and third-party liabilities, such as damage to the property or injury or death of a third party

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


Flexibility to add add-on covers like consumable cover, engine protection cover, zero depreciation cover, roadside assistance cover, 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


Due to the availability of extensive coverage, a comprehensive four-wheeler policy is comparatively expensive

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


Insurance is the subject matter of solicitation. 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, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited and ManipalCigna 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. Visitors are hereby informed that their information submitted on the website may 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, 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 value-added service provider or Assistance 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.