A third-party liability car insurance policy is an agreement between the insurer and the insured (vehicle’s owner) where the insurer promises to offer financial protection to the insured against third-party liabilities arising due to a mishap in exchange for a fixed amount called premium.
There are a number of general insurers providing third-party car insurance plans, including the auto dealers who as of recently have been recognised by the Insurance Regulatory and Development Authority of India (IRDAI) as authorised Motor Insurance Service Providers (MISPs).
Key Benefits and Features of Third-Party Liability Car Insurance Policy
Third-party liability car insurance comes with a number of features and benefits such as:
- Offers financial support in the event of a mishap involving a third-party and protects you against the third-party liabilities that may arise
- Provides tax benefits to the policyholders
- Can be easily purchased via insurer or third-party insurance websites
- Available at low premium rates
Inclusions and Exclusions of a Third-Party Liability Car Insurance
Third-party liability car insurance comes with certain inclusions and exclusions.
The following are the inclusions of a third-party liability cover:
- Protects against the liabilities arising from external property damage due to the mishap.
- Offers protection against the liabilities arising from the damage/loss to a third-party vehicle involved in the mishap.
- Protects against the liabilities that arise from injuries/personal loss to the third-party involved in the mishap.
- Personal Accident cover is being offered as an add-on for third-party liability cover by a few insurers. This add-on will extend the third-party insurance coverage to the insured in case of injuries/personal loss.
The following are the exclusions of a third-party liability cover:
- The insurance cover will not be applicable in case you were driving under the influence of alcohol or drugs when the mishap took place.
- The insurance cover will not be applicable in case you raise fraudulent claims and/or stage mishaps.
- If the person driving the vehicle is underage or doesn’t have a valid driving licence, the insurance cover will become void.
- If the person broke traffic rules while driving, the insurance cover will become void.
- If you use a commercial vehicle for private reasons or vice-versa, your insurance claim will be denied.
- Third-party liability cover does not include own damage cover, which means that liabilities arising due to damage to your vehicle or injuries to you will not be covered.
- In case your insurance policy expires or you fail to renew your insurance policy on time, your insurance claim will be denied.
- Liabilities arising due to regular wear and tear of your car as a result of aging is not covered.
- Liabilities arising due to electrical and/or mechanical failures are not covered.
- If the mishap took place outside of the agreed geographical location, your insurance claim will be denied.
Third-Party Car Insurance Premium
Third-party car insurance premiums are fixed and published by the IRDAI annually based on the cubic capacity (cc) of the vehicle’s engine.
The basic third-party liability insurance premium for private cars for the fiscal year 2017-18 are as follows:
|Private cars with their engine capacity (cc)
||Basic third-party car insurance premium (1st April 2017-31st March 2018)
|Less or equal to 1000 cc
|More than 1000 cc but less or equal to 1500 cc
|More than 1500 cc
Insurance claim process for third-party liability cover
The steps involved in the claim process for third-party liability cover are standard across all insurers and are as follows:
- Intimate the insurer as soon as the mishap takes place and raise a third-party liability claim.
- Inform the insurer about the liabilities that have arisen due to the mishap in a written letter.
- Lodge an FIR at the nearest police station and obtain a copy of the same.
- Collect details of the third-party and his/her vehicle involved in the accident, contact details of the witnesses, if any, and necessary documents as requested by the insurer.
- An authorised surveyor will be sent to carry out an incident survey to assess the loss/damage.
- Submit a duly signed and filled claim form along with the requested documents to the authorised surveyor.
- File a case at the nearest Motor Accident Claims Tribunal (MACT) court with the assistance of your lawyer.
- The court will send you a date for the hearing. Attend the hearing with your lawyer. Based on the court's ruling, you may/may not have to pay towards the third-party liabilities.
Third-party Liability Car Insurance FAQs:
Can anyone buy a third-party liability car insurance policy?
Yes, anyone who owns a car that is officially registered in his/her name can buy a third-party liability cover.
Can I port the existing third-party liability car insurance to another insurer?
Yes, you can port your existing insurance policy to another insurer after submitting a duly filled portability form to your present insurer at least 45 days before the policy expires.
Do I have to buy a third-party liability cover even if I am a good driver?
Yes, it is an absolute necessity as per the Motor Vehicle Act to purchase at least a third-party liability car insurance in India regardless of whether or not you are a good driver.
What is the maximum compensation I can avail under a third-party liability car insurance?
In case of third-party injuries or loss of life, there is no limit on the compensation at present. But when it comes to third-party property damage, the maximum compensation you can avail is Rs.7.5 lakh.
How long after the mishap happens should I register for a third-party liability claim?
You have to inform the insurer as soon as the mishap happens and raise a third-party liability claim request. You also have to file a case in the nearest Motor Accident Claims Tribunal (MACT) court within a period of 60 days from the date of mishap.