Third-party insurance is mandatory for vehicles traveling on Indian roads under the Automotive Act, 1988. Beneficiaries of this type of insurance are not providers of insurance or policyholders.
In fact, the beneficiary is a third party not mentioned in the insurance contract. The third car insurance scheme protects the policyholder from third-party financial and legal liabilities.
It covers debts caused by accidental injury, death or physical injury to a third party (person, property or vehicle) caused by an insured car. According to IRDAI, Rs. 7.5 lakh is the maximum limit where a third party may be compensated for damages caused by an insured vehicle.
The amount is Rs. 1 lakh in the event of damage caused by a two-wheeled tire. However, there is no claim limit in the event of your death.
Types of Third-Party Insurance
Third-party car insurance can be divided into two parts:
• Third-party Car Insurance
• Third-Party Two-wheeled insurance
1. Responsible Vehicle Insurance Third: In the event of an accident, this insurance provides compensation for any damage or injury resulting from an insured car. The system does not provide any cover for loss/damage to an insured vehicle.
2. Third Party Insurance Two Wheel Insurance: The legal requirement for Third Party Insurance for all vehicles operating on Indian roads extends to two-wheelers. Therefore, this type of cover compensates the third party for any legal liabilities in the event of an insolvent vehicle (two-wheeled) fault.
What Does the Third Party Insurance Cover?
The following are covered under third party credit insurance, in the event of an accident caused by a two-wheeled vehicle/driver:
• Third-party physical injuries
• Third-party death
• Damage to third party property
• Costs incurred in the event of a third party being sued
Not covered things under Third-Party Insurance
Here are a few things/conditions that third party insurance does not cover:
• Accidental damage/loss/debt arising out of place
• Injuries, losses, and/or debt resulting from attacks, war or activities such as war
• Claims that may arise from any contractual debt
• Obligation resulting from nuclear weapons or radiation exposure, directly or indirectly
• Use the vehicle in a manner that does not conform to commonly used limits
• Third-party accidental damage/loss resulting in significant loss
• In the event that the vehicle was driven by someone other than the driver or the designated owner
• In the event of a driver at the time of the accident without a valid license or if the policy does not apply at the time of the incident
Procedure to claim Third-Party Insurance in India
The Third Commitment Insurance Claims Process has the following steps:
1. A claim is required from the owner of the vehicle from the victim or the lawyer for the deceased to obtain a third-party debt compensation.
2. After successful submission of the application, an FIR must be submitted. A copy of the MOTO and a record of the expenses incurred by the victim must be kept for future use.
3. Accordingly, the case must be registered with the Motor Vehicle Accident Claims Council.
4. The third party is then compensated for the full amount or amount determined by the court. Third-party insurance claims do not have high releases. However, the IRDA has limited the maximum asset damage cover to Rs. 7.5 lakh.
Let's look at some points to keep in mind about third party insurance:
• The main beneficiary of the Third Party Commitment insurance is the third party and not the insurer (the policyholder) as the money is paid directly to the third party (victim or attorney for the deceased) by the insurance company.
• Insurance damage or damage to his or her property is not covered under Third Party Compensation insurance
• Premiums do not differ in the amount of an insured car as it is a “legal debt” and it is not possible to predict debt.
Third-party to protect against major financial losses. Let's look at some of the benefits:
• Financial Aid and Legal Cover: Includes the legal liability for insurers in the event of injury, disability, death, or loss or damage to third-party property. It provides financial assistance and takes care of the legal obligation of insurers
• Easy and Quickly Available: Third-Party Commitment Insurance can be purchased and readily available. It can also be easily updated online.
• Cost Operations: Insurance systems are expensive as premiums are low. In fact, the IRDA renews the annual premium rate and is usually a limited nomination fee.