• Third Party Liability Car Insurance

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    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

    IRDAI directs insurers to roll out long-term third-party insurance for four-wheelers

    In August 2018, the Supreme Court of India issued a directive to the Insurance Regulatory Development Authority of India (IRDAI) to roll out the long-term third-party insurance for four-wheelers as well as for two-wheelers. Prior to the mandate, the long-term third-party insurance was available for only two-wheelers. Now, for all vehicles that are bought after 1 September 2018, the car owners as well as two-wheeler owners have to purchase the long-term third-party insurance. This is applicable for those vehicle owners that have to renew their motor  insurance policy.

    The decision of the Supreme Court for the long-term third-party insurance was taken since a majority of the vehicles on the roads of India are uninsured, despite the fact that India has the most accidents and deaths on its roads in the world. In addition, a factor that has impeded vehicle owners from insuring their vehicle is that they have to go through the hassle of renewing their insurance policy year after year. Now, following the directive of the Supreme Court, four-wheelers have to have the 3-year long-term third-party insurance and two-wheelers have to insure their cars with the third-party liability insurance for a tenure of 5 years.

    According to the Insurance Regulatory Development Authority of India (IRDAI), the long-term third-party insurance policy has to be availed by vehicle owners across the country irrespective of whether they have the comprehensive car insurance policy with a third-party liability cover. That said, insurers in the country have the option of offering two different types of policies - the long-term third-party insurance policy and the comprehensive insurance policy, or a comprehensive car insurance policy with the long-term third-party insurance.

    Though car owners will be insured for a longer span and wouldn’t need to go through the process every year, the premiums of the third-party insurance policy have got more expensive as well. That said, the long-term third-party insurance is a one-time payment, and policyholders will save in the long run as they would avoid the hike in the third-party insurance premiums, which is the case every year.

    Long-term Third-Party Insurance Premium Rates that are effective from 1 September 2018

    As already mentioned, from 1 September 2018, all four-wheelers and two-wheelers that are sold have to have the long-term third-party insurance. Vehicle owners who need fresh policies or who  need to renew their motor insurance policy will have to buy the long-term third-party insurance. This is whether or not the vehicle owner has a comprehensive car insurance policy with the third-party liability cover. The long-term third-party motor insurance will be rolled out by insurers across the country as a new product and eventually, a comprehensive car insurance policy will come with the long-term third-party liability. While two-wheeler and four-wheeler vehicle owners will be insured for a longer span and wouldn’t need to go through the process every year, the premiums have been hiked significantly. For cars with an engine capacity less than 1,000 cc the premium of the long-term third-party insurance is set at Rs.5,286.  For cars with engine capacity between 1,000 cc to 1,500 cc policyholders will have to shell out Rs.9,534 as the premium for the long-term third-party insurance. For four-wheeler with an engine capacity more than 1,500 cc, the premium of the long-term third-party insurance is set at Rs.24,305 by the Insurance Regulatory Development Authority of India (IRDAI).

    For two-wheelers, the long-term third-party insurance policy which will be valid for five years will cost the policyholder Rs.1,045 if the engine capacity of the vehicle is below 75 cc. For two-wheelers with an engine capacity between 75 cc and 150 cc, the premium is set at Rs.3,285. For two-wheelers with an engine capacity between 150 cc and 350 cc, the premium of the long-term third-party insurance is set at Rs.5,453. Lastly, for vehicles with an engine capacity more than 350 cc, the premium as set by the  Insurance Regulatory Development Authority of India (IRDAI) is Rs.13,034.

    Table for the revised premium rates for the long-term third-party insurance policy following 1 September 2018

    For four-wheelers (private and commercial):

    Engine capacity Revised premium rates (for the four-wheeler long-term third-party insurance)
    Less than 1,000 cc Rs.5,286
    Between 1,000 cc and 1,500 cc Rs.9,534
    More than 1,500 cc Rs.24,305

    For two-wheelers (private and commercial)

    Engine capacity Revised premium rates (for the two-wheeler long-term third-party insurance)
    Below 75cc Rs. 1,045
    Between 75 cc and 150 cc Rs.3,285
    Between 150 cc and 350 cc Rs.5,453
    More than 350 cc Rs.13,034

    Long-term third party insurance for private cars

    Following the Motor Vehicles Act, 1988, all cars on the roads of India have to have the third-party car insurance policy, and more recently, as mandated by the Supreme Court, all new cars and those who have to renew their motor insurance policy have to purchase the long-term third-party insurance. Now, car owners with a single premium payment can have their car insured with the third-party car insurance policy for a tenure of 3 years. The third-party insurance policy for private cars has been made mandatory to ensure that following an accident, the property of the third-party is taken care of by the insurance policy and the medical expenses are covered by the policy as well. However, with the third-party insurance policy, the policyholder cannot claim coverage for his/her own vehicle and for medical expenses, and would need to cover the expenses for the repairs and the medical treatment from their own pocket. To help car owners understand the extent of coverage of the third-party insurance policy, we’ve listed out what such a motor insurance policy takes care of and its exclusions.

    Coverage of long-term third-party car insurance for private vehicles

    Listed below is the extent of coverage of the long-term third-party insurance policy:

    • The long-term third-party insurance offers coverage for the damage caused to the vehicle or the property of the third party only. Coverage of the long-term third-party insurance is not extended to the policyholder.
    • Coverage is extended for medical treatment if the accident leads to bodily injury, or disability (partial or total) of the third party.
    • Compensation if the accident leads to the death of the third party.

    Exclusions of the long-term third-party car insurance for private vehicles

    Listed below are situations in which the coverage of the long-term third-party will not be extended to the policyholder:

    • No coverage of the long-term third-party insurance will be extended to repair the damages caused to the vehicle of the policyholder nor will any coverage be extended to cover the cost of medical treatment of the policyholder following an accident.
    • If the accident occurs in an area, city, or state that is not covered by the insurer.
    • If the accident was the fault of the third party and not the policyholder.
    • If the policyholder was driving under the influence of alcohol, drugs, or any intoxicants.
    • If the long-term third-party insurance policy has lapsed.
    • If the policyholder was driving without a valid driving license.
    • If the damage caused to the car was due to nuclear activity.
    • If the vehicle was being used for commercial purposes.

    Long-term third party insurance for commercial vehicles

    For those who are using a commercial vehicle they would need to avail a commercial long-term third party insurance and not a third-party insurance for a private vehicle. Just like the third-party car insurance for private vehicle, the third-party car insurance policy for commercial vehicles extends coverage to the third-party only to take care of damages caused to his/her property and coverage for medical expenses if the third party is either injured or disabled by the accident. The long-term third party insurance for commercial vehicles also offers compensation in the case of death of the third-party.

    Coverage of long-term third-party car insurance for commercial vehicles

    Listed below is the extent of the coverage of the long-term third party car insurance policy:

    • Coverage for repair or replacement of damaged parts of the vehicle of the third party.
    • Coverage for medical expenses if the third party suffers from partial or complete disability or bodily injury.
    • Compensation that will be passed on to the dependents of the third party if the accidents leads to the death of the third party.

    Exclusions of the long-term third-party car insurance for commercial vehicles

    No coverage will be extended to the policyholder if the accident takes places due to any of the below-listed circumstances:

    • If the accident involving the commercial vehicle occurs outside the perimeter covered by the insurer.
    • If the commercial vehicle driver was under the influence of alcohol, drugs, or any intoxicants when the accident took place.
    • If the long-term third-party insurance policy for the commercial vehicle has expired.
    • If the commercial vehicle driver was driving with an expired driving license.
    • If damage was caused to the third party due to nuclear activity.
    • If the commercial vehicle was used for a purpose other than what it was meant for.

    Steps to raise a claim using the long-term third party insurance for cars

    As soon as the accident takes place involving the private or the commercial vehicle, the policyholder has to follow the steps mentioned below to raise a claim for coverage caused to the property of the third party:

    • The insurer has to be intimated as soon as the accident has taken place. Some insurers insist on sending a spot surveyor to gather information about the accident. The policyholder has to also take photographic evidence of the accident scene.
    • The policyholder has to then go to the local police station and file an FIR and the statements of both will be taken into account by the police.
    • Once the claim has been raised, the insurer will then forward the case to the Motor Accidents Claims Tribunal.
    • Following investigation, the Motor Accidents Claims Tribunal will approve whether the claim amount has to be disbursed or not. If the policyholder is found guilty of the accident, the insurer will extend the coverage to the third party for repair or replacement of the damaged vehicle and coverage for medical expenses as well.

    Both the parties will have to submit their statements and personal details to the police and the insurer. As per the limit set by the Insurance Regulatory Development Authority of India, the maximum payout for property damage of the third party is set at Rs.7 lakh.

    Third-party Liability Car Insurance FAQs:

    1. 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.

    2. 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.

    3. 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.

    4. 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.

    5. 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.

    News & Important Update On Third Party Car Insurance

    • IRDAI directs insurers to offer long-term third-party insurance

      The Insurance Regulatory and Development Authority of India (IRDAI) directed general insurance companies to offer three-year insurance plans to new car owners and five-year insurance plans to new two-wheeler owners. The regulation came in after the Supreme Court made long-term third-party insurance policies mandatory. Previously, only annual third-party insurance plans were made mandatory in order to ensure victims of road accidents are provided with financial aid. However, most insured individuals tend to forget to renew their policies. Therefore, only about 1/3rd i.e. 6 crore out of 18 crore vehicle owners actually have insurance policies. The insurance companies welcome the new regulation and will soon offer long-term insurance plans at revised premium rates. While the new rule will increase insurance penetration and keep vehicle owners insured for a longer period, the insurance policies will cost much more for the people. While average-prices two-wheelers will require owners to pay affordable premiums, car owners will have to shell out a lot more. According to a report, the approximate long-term insurance premium for a 350+ cc bike is Rs.13,034 but for a 1,500+ cc car is Rs.24,305.

      11 September 2018

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    Third Party Liability Car Insurance Reviews

    • review Car Insurance
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      I am holding the car insurance policy with the ORIENTAL INSURANCE where i ma using it since from last 1.5 years where i have not experienced with any claim with this policy added on that the policy coverage is for 3rd party insurance. The premium is lower and the IDV value is good.
      Was this review helpful? 1
      , bangalore
      Reviewed on Jan 16, 2019
    • Royal Sundaram Car Insurance
      "Good"
      0.5 5.0/5 "Blown Away!"
      The customer service and response was great with Royal Sundaram. The main reason to choose the policy for lower premium. It is a third party insurance. I don't have any claim till now. I got the insurance paper. I have paid the premium 18K through online.
      Was this review helpful? 0
      , jamnagar
      Reviewed on Jan 03, 2019
    • Iffco Tokio Car Insurance
      "Good"
      0.5 4.0/5 "Great!"
      I have a car insurance with Iffco Tokio and its been almost 10 to 12 years. I have no claim till now. I am happy with the insurer and it was easy to renew every year, this insurance was suggested by the showroom retailer and am continuing with them. It is a third party insurance. The premium is economical.
      Was this review helpful? 0
      , aurangabad
      Reviewed on Dec 30, 2018
    • HDFC Ergo Car Insurance
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I am happy with the HDFC Ergo car insurance. The claim process was very easy and two times I made a claim. The garages are near to my place for cashless, I had bumper to bumper. It was a third party insurance. The premium is reasonable with the good IDV value.
      Was this review helpful? 0
      , erode
      Reviewed on Dec 30, 2018
    • Universal Sompo Car Insurance
      "Good"
      0.5 4.0/5 "Great!"
      I did not gone for a claim with Universal Sompo, I have chosen the mainly for lower premium. It is a third party insurance. The policy period is one year. I have made the premium through online. I have received the soft copy and not got the hard copy yet. It is not easy to talk with the customer service and there is no option for Telugu language mostly they prefer to talk in Hindi. They should have an option for other language.
      Was this review helpful? 0
      ,
      Reviewed on Dec 29, 2018
    • Royal Sundaram Car Insurance
      "Good"
      0.5 4.0/5 "Great!"
      Once I have taken the insurance and not contacted the customer service. IDV value was good with Royal Sundaram and also the premium is reasonable. It is a third party insurance. It covers bumper to bumper and road side assistance but there is no claim till now.
      Was this review helpful? 0
      , pondicherry
      Reviewed on Dec 29, 2018
    • Chola Ms Car Insurance
      "Better"
      0.5 4.0/5 "Great!"
      I have purchased a new car and the insurance was offered by the showroom with CHOLAMANDALAM GENERAL INSURANCE. It is a third party insurance and don't know the premium, I have done a claim. During the claim process they have mentioned as payment to the repairer and they were asking the details like Aadhar card no and bank details continuously to me. I was getting unnecessary msg which can be avoided. Bumper to bumper offer plus road side assistance included on the policy.
      Was this review helpful? 0
      , salem
      Reviewed on Dec 29, 2018
    • HDFC Ergo Car Insurance
      "Good"
      0.5 4.0/5 "Great!"
      The premium is little bit high and there was no claim experience even with HDFC Ergo so I have changed my insurer for this time. The customer service is good. It is a third party insurance. I have purchased the car insurance through online. They called me to intimate about the policy renewal.
      Was this review helpful? 0
      , delhi
      Reviewed on Dec 20, 2018
    • Royal Sundaram Car Insurance
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      The customer service was satisfactory. I have taken a car insurance from Royal Sundaram which has reasonable premium. It is a third party insurance. The policy period is one year and I don't remember the premium which was taken long back. There was no claim experience. It has better IDV value and they provide a bumper to bumper offer.
      Was this review helpful? 0
      , delhi
      Reviewed on Dec 20, 2018
    • Royal Sundaram Car Insurance
      "So far its good"
      0.5 4.0/5 "Great!"
      I have taken the car insurance with Royal Sundaram and have not claimed anything. The premium and the benefits are average. I did not get the hard copy and received the soft copy which I printed out. It is a third party insurance. IDV value is average.
      Was this review helpful? 0
      , guwahati
      Reviewed on Dec 20, 2018
    • Bajaj Allianz Car Insurance
      "Good coverage for the used car"
      0.5 5.0/5 "Blown Away!"
      Bajaj Allianz has lower premium and the benefits are comparatively better than others when I compared online. I don' t have any claim, I have received the documents.It is a third party insurance. I hold a second-end car, the bumper to bumper is applicable and policy coverage seems to be okay.
      Was this review helpful? 0
      , chennai
      Reviewed on Dec 19, 2018
    • Royal Sundaram Car Insurance
      "Good"
      0.5 4.0/5 "Great!"
      I have a used car and they have offered good IDV value. The main reason to choose Royal Sundaram because of low premium. It is a third party insurance, I had no interaction with the customer support and no claims till now. The policy coverage is one year.
      Was this review helpful? 0
      , mumbai
      Reviewed on Dec 17, 2018
    • Liberty Car Insurance
      "Good coverage for the used car"
      0.5 5.0/5 "Blown Away!"
      Bajaj Allianz has lower premium and the benefits are comparatively better than others when I compared online. I don' t have any claim, I have received the documents.It is a third party insurance. I hold a second-end car, the bumper to bumper is applicable and policy coverage seems to be okay.
      Was this review helpful? 0
      , navi mumbai
      Reviewed on Dec 17, 2018
    • review Car Insurance
      "Good"
      0.5 4.0/5 "Great!"
      I have purchased a new car and got my insurance with ICICI Lombard. It was offered by the showroom and I said no issues to take this policy. I am yet to compare so no idea about the premium. Now introduced a new insurance third party insurance for 3 years. I got the hard copy and not received the soft copy.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 14, 2018
    • Chola Ms Car Insurance
      "Good in all"
      0.5 4.0/5 "Great!"
      Cholamandalam General insurance is good in the customer services. They are responsive as well. I have taken a car insurance policy. The premium is nominal and the policy coverage value is good. There are benefits of a road side assistance and also a third party coverage.
      Was this review helpful? 0
      , kanchipuram
      Reviewed on Nov 08, 2018
    • HDFC Ergo Car Insurance
      "Easy to approach"
      0.5 4.0/5 "Great!"
      There was no claim, as of now everything is okay. I just took policy for RTO purpose, they gave me good coverage value for my vehicle. I took third party plan which its includes personal accidental cover. HDFC Ergo is easy to approachable always.
      Was this review helpful? 1
      , gurgaon
      Reviewed on Oct 31, 2018
    • Bharti Axa Car Insurance
      "Yet to experience the policy"
      0.5 4.0/5 "Great!"
      I just compared the premium with other companies and i have selected the policy. The customer care service has done a great follow up. I'm not sure about the garage facility details. I'm satisfied with the coverage amount and i have made a nominal premium amount. I have taken the third party insurance which covers for the car, driver and passengers.
      Was this review helpful? 1
      , mumbai
      Reviewed on Oct 31, 2018
    • HDFC Ergo Car Insurance
      "Covenient to avail it"
      0.5 5.0/5 "Blown Away!"
      For Availing the insurance and customer care service is very good. I have selected the HDFC Ergo because i read the reviews of HDFC Ergo. I pay the premium amount of Rs. 15000 around and i have got a satisfied coverage amount. This is a third party insurance which covers for the passengers also. The documentation process was smooth.
      Was this review helpful? 0
      , lohardaga
      Reviewed on Oct 30, 2018
    • New India Car Insurance
      "Good Policy"
      0.5 4.0/5 "Great!"
      My friend circle has given suggestion about this insurance company. Till now i have not gone for any kind of claiming experience. Nearly Rs. 8000 i have paid as a premium amount. They have given me a coverage amount of Rs. 2.93 lakhs. This policy covered for theft and accidental. This is a third party insurance hence its covers for driver and passengers.
      Was this review helpful? 0
      , poonamallee
      Reviewed on Oct 29, 2018
    • HDFC Ergo Car Insurance
      "Very satisfactory for four wheeler"
      0.5 5.0/5 "Blown Away!"
      Just because of the advertisement I found the online channel to avail HDFC Ergo policy, they are reputed and their brand value is good. The IDV is also good they fixed the value based on the manufacturer year of vehicle I took Basic plan, which has third party liability.
      Was this review helpful? 0
      , lucknow
      Reviewed on Oct 22, 2018
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