As per the Motor Vehicles Act, it is mandatory for every car plying on the roads in India to be insured with at least a third-party liability cover. Car insurance protects the policyholder from unforeseen liabilities as a result of an unfortunate mishap. Car insurance can be comprehensive or liability only. A comprehensive car insurance plan covers third-party liabilities and own damage liabilities while a third-party liability car insurance plan covers only third-party liability at the time of a mishap.
What is Third-Party Insurance?
A third-party car insurance or liability-only cover is one of the insurance policies available under general insurance. Third-party liability cover is simple, offers a limited coverage and is mandatory as per the Motor Vehicles Act. It is of absolute importance and in the interest of all those cars plying on the roads to insure your vehicle with a third-party liability cover.
Third-party liability insurance plan covers the following:
- Liability towards damage/loss to the third-party vehicle involved in the mishap
- Liability towards injury of the third-party involved in the mishap
- Liability towards damage/loss to an external property involved in the mishap
Third-party liability insurance plan does not cover the following:
- Liability towards injury to the policyholder involved in the mishap
- Liability towards damage/loss to the insured vehicle involved in the mishap
Claims Filing Process
In case you suffer any loss/damage as a result of mishap that was someone else’s fault, you can choose to file a claim against the car owner who was at fault. In case you are at fault, the third party or third parties involved in the mishap can raise a claim against you. The claim process for third-party liability cover can vary depending on the kind of claim, type of incident and the severity of the incident.
Below are the steps to be followed in case of property damage as a result of mishap:
- In case the mishap results in third-party property damage, the person can file a claim via the nearest Motor Accident Claims Tribunal
- The person raising a claim should have the insurance details of the insured vehicle that was at fault when the mishap took place
- File an FIR at the nearest police station providing complete incident details
- The vehicle insurance details and a copy of the FIR need to be provided when your claim is being filed
- Based on the ruling by the Motor Accident Claims Tribunal, the claimant will receive the compensation based on the documents and incident details submitted
- As per government law, compensation offered to the third-party for property damage cannot be over Rs.7.5 lakh.
Below are the steps to be followed in case of injury, disability or death as a result of mishap:
- In case of a mishap that resulted in injury, death or disability of the third party involved in the accident, a third-party claim can be filed against the policyholder to receive appropriate compensation.
- File an FIR at the nearest police station and provide accurate incident details
- Obtain insurance details of the insured vehicle involved in the accident
- The policyholder has to raise a claim at the nearest Motor Accident Claims Tribunal and submit the copy of FIR along with motor insurance details of the insured vehicle
- The Motor Accident Claims Tribunal will give the verdict on the compensation based on the documents submitted
- The policyholder/owner of the insured vehicle may approach the third party for an out-of-court settlement
- The third party filing the claim should submit the originals and copies of the relevant documents
- The third party filing the claim should inform the insurer as well so that the policyholder at the time