What is Third-Party Insurance?

According to the Motor Vehicle Act, third-party insurance, often known as ‘act-only’ insurance, is a legal necessity for all vehicle owners. It is a form of insurance policy that protects the insured against damage to a third-party vehicle, personal property, and bodily injury.

What is TP in insurance?

The third-party (TP) vehicle cover is one of the types of car insurance available in India. It provides financial security to the policyholder, in case of any damage or loss caused to a third party or his/her property. This insurance will cover any financial liability that may arise as a result of the accident. According to the Motor Vehicles Act, TP insurance is mandatory for vehicle owners to drive their vehicle on Indian roads. The third-party premium rate is set and notified by the Insurance Regulatory and Development Authority of India (IRDAI) at the start of each financial year, based on the capacity of the car or two-wheeler.

How does third-party insurance work?

If a policyholder with third-party motor insurance is involved in an accident, the car insurance company will give financial coverage for any damage or loss caused to the third party or his property damage.

In the event of an accident, the insured person should notify the insurer as soon as possible before filing a claim. The insurance company appoints a surveyor to inspect the extent of the damages and verify the anticipated repair cost once the claim is filed. The insurance company pays the claim amount after the verification process is completed.

The process to claim third party insurance is-

The policyholder must follow the claim rules in order to receive compensation from the insurance company. The stages for filing a claim for third-party insurance are as follows:

  • First and foremost, the insurance holder must report the accident to the insurance company within the time frame specified in the policy contract.
  • The policyholder must report the accident to the nearest police station and obtain a copy of the report.
  • File a claim with the lender - fill out the form and provide the required documentation.
  • The insurer will send a surveyor to inspect the damage and confirm the estimated cost after receiving the claim paperwork. Following the assessment, the surveyor submits a report.
  • The insurance compensates the claim based on the findings.

How to check third-party car insurance?

Checking your car insurance status is a basic and straightforward procedure. The IRDAI has launched the Insurance Information Bureau (IIB), a data repository for insurance. IIB is a web gateway that allows you to keep track of your vehicle's insurance policy details. The steps to check your car insurance status online are as follows:
• Step 1- Visit the IIB's website.
• Step 2- Enter the required details such as name, email ID or mobile number, address, car registration number, accident date and the security ‘Captcha’ code.
• Step 3- Click on submit.
• Step 4- The car's linked insurance policy information will be displayed; however, if it is not available, the previous policy information will be displayed.
• Step 5- If the foregoing procedure fails to yield any results, you can look up the car's engine and chassis number.

Third-party insurance plan inclusions/exclusions

Here’s a list of common inclusions under third-party insurance plans.

Inclusions
Even though third-party car insurance has a restricted coverage, it is nevertheless necessary to include the following coverage:

• Third-party property damage:
As per the IRDAI regulations, the third-party coverage provided for all third-party property damage is up to Rs. 7.5 lakh.

• Third-party death/bodily injury:
Third-party insurance protects a third party against harm caused by the insured vehicle. Physical injuries, car damage, property damage, and death are all covered under this plan. The insurer pays out 100% in the event of a third-party’s death and 50% in the event of partial blindness or limb loss. A court of law determines the amount of compensation for third-party liabilities.

Exclusions

Here’s a list of common exclusions under third-party insurance plans.

  • If the collision was caused by intoxicated driving, third-party insurance will not compensate you.
  • The driver/rider is either under the age of 18 or has been convicted of driving without a valid driver's licence.
  • It was planned conduct that resulted in the accident.
  • The vehicle was not used for any commercial or unlawful purposes.
  • The vehicle was stolen.