Third-party insurance means protecting the policyholder from legal and financial liabilities arising from damages caused to a third party. It involves covering financial and legal liabilities arising from vehicle damage, injuries, property damage, and accidental death of the third party. According to the Motor Vehicles Act, 1988, every vehicle must have valid third-party liability insurance in place.
What is Third Party Insurance?
A third party car insurance plan is a type of motor insurance policy that covers third party legal liabilities if the insured car is involved in an accident on the road. Moreover, it also covers financial liabilities arising from vehicle damage, injuries, or accidental death of the third party by the insured vehicle. For example, if the car hits a pedestrian walking on the road or another car on the road.
The third-party car insurance covers accidental damage and injury caused to the third party by the insured vehicle. The third-party liability insurance covers situations like:
- Property Damage
- Vehicle Damage
- Death of the 3rd Party
- Bodily Injuries caused to the 3rd party
However, third party insurance does not cover any liabilities that arise if the driving is drunk while driving the insured vehicle.
Apart from the third party, you can buy a comprehensive insurance policy that covers the financial losses arising from damages caused to your car due to natural and artificial calamities like fire, storm, etc.
Why is Commercial Vehicle Insurance Important?
Commercial vehicle insurance is essential for several reasons. These include:
- Suppose you own one or more vehicles for business purposes. In that case, commercial vehicle insurance will protect your business from any financial losses that may arise due to accidents or damages caused to or by the vehicle and the people using it.
- As mandated by the Law, a Liability Only coverage is compulsory to drive the vehicle on the roads in India. This coverage protects you from financial losses that may arise due to damage caused to third parties by your commercial vehicle.
- If you own a business that regularly uses vehicles, the owner and the passengers will have the assurance that they are covered for and protected.
Why Is Third Party Insurance Important?
Apart from the fact that having third party car insurance is mandatory under the law, this type of insurance comes in handy when your vehicle is involved in an accident. Calculating the damage caused due to an accident beforehand is quite tricky, and accidents sometimes cause death also. A third party car insurance plan will provide you protection against the financial losses that arise due to such situations. The victim can claim compensation, which the insurance company will provide on your behalf if you have a valid insurance policy.
How Does Third Party Insurance Work?
As stated earlier, third party insurance helps ease the financial burden on the first party that arises due to financial or legal claims filed by the third party. In this case, the first party refers to the person who owns the insured vehicle. Third-party refers to the person who is filing the compensation claim. Second-party refers to the insurance company that will settle the claims on behalf of the first party.
Insurance companies offer two types of third party claims under this insurance- bodily injury liability and property damage claim.
Third-party bodily injury claims arise when the insured vehicle causes bodily injury to the third party. The claim provides coverage for hospitalization, loss of income due to death or permanent disability, etc.
Third-party property damage claims arise when the insured vehicle causes damage to the property of the third party. It includes claims that arise due to damaged landscapes, fencing, front lawn, mailboxes, etc., and replacement of loss of buildings like shops.
Features of Third Party Insurance
There are some significant features of third party vehicle insurance that you must know about. These include:
- The injured third party and the insured are the beneficiaries in third party insurance. But these are just the mentioned beneficiaries. In reality, the insurance money is directly credited to the insurance company or the third party or the heir (in case of death).
- On these plans, the IDV of the insured vehicle is not considered as it is considered a legal liability, and the value of legal liability cannot be decided beforehand.
- The injuries caused to the owner-driver are not covered under a third party plan unless you have opted for a personal accident for the owner-driver. It only covers the bodily injuries caused by the insured vehicle to the rest of the world.
- The process of buying and renewing vehicle insurance has become easy and seamless with the help of online third party car insurance. You can easily renew or buy an insurance policy by visiting the Renewbuy website.
- Third-party claims may involve taking help from lawyers.
Thus, these are the features of a third party insurance plan that you must know about. Multiple companies offer these plans, so consider all the aspects and buy the best plan for yourself.
Benefits of Third Party Insurance
A third party insurance plan comes with many advantages. To know the importance of a third party cover, you must read the benefits that are mentioned below:
Offers Financial Protection and Legal Cover
Legal liabilities can lead to bankruptcy and financial burden if the vehicle owner cannot pay for the damages caused to the third party. It can be financially draining and can lead to a dent in the savings. With a third party plan in place, your legal liabilities are taken care of by the insurance company so you can keep your savings for other purposes. This is one of the primary reasons why one should buy insurance cover.
Mandatory Under Law
Having a third party insurance plan is compulsory under the Motor Vehicles Act, 1988. If you want to drive your car on the roads in India, then third party insurance is required. In case you do not have a valid insurance plan, you can face fines and punishment. Thus, as a law-abiding citizen of the country, you must have a third party insurance plan before driving your car in India.
Easy and Seamless Process
Buying third party insurance is an easy and convenient process that you can do from the comfort of your home. The IRDA has already fixed a price for third party insurance, so there will be o discrepancies. You can use your phone or laptop to buy a third party insurance policy online. You can also renew your policy online without any issues at all.
A third party car insurance policy is cost-effective for the premium you need to pay for the policy. You have to pay a lesser premium for a third party liability policy than a comprehensive insurance policy. This makes the policy highly cost-effective and affordable.
Peace of Mind
3rd party car insurance helps the owner to drive the car without any stress. This is because they do not have to worry about arranging money in case the vehicle is involved in an accident on the road that causes injury or property damage to a third party. Thus, this protection from unforeseen third party liabilities helps the owner drive peacefully on the roads in the country.
These are some of the significant advantages of a third party insurance cover that you must know about. This will also help you understand why buying an insurance cover is beneficial for every vehicle owner.
What is Covered Under a Third Party Insurance Plan?
A 3rd party car insurance covers damages or injuries caused to a third party by the insured vehicle. The insurance policy also covers property damage up to a limit of Rs 7.5 lakhs. To know what is covered under a third party insurance plan, read below:
Injuries Caused to a Third Party
A third party insurance plan covers Injuries caused to a third party by the insured vehicle. The vehicle owner is responsible for paying for the injuries, so the insurer pays for it in case of a third party insurance plan. The insurance covers the costs of treatment in case of bodily injuries. In case of disability, the Motor Accidents Claims Tribunal will decide the amount to be paid after careful consideration. In the case of partial disability, the compensation amount is paid as decided by the MACT.
Damages to the Vehicle of the 3rd Party
If the insured accidentally hits the third party's vehicle, then the cost of damages is covered under the third party car insurance plan. The insurance company pays for the damages on behalf of the insured vehicle's owner.
Accidental Death of the Third Party
Suppose the insured vehicle runs over the third party or causes fatal injuries to the third party that leads to an untimely demise. In that case, the compensation amount will be paid to the third party by the insurance company. The amount of compensation that needs to be paid is decided by the MACT. The insurance company pays the total compensation to the heir of the third party on behalf of the owner of the insured vehicle.
The insurance policy covers the damages or loss of property caused by the insured vehicle. If the insured vehicle rams into a property of the third party, like a lawn or a boundary wall, the compensation will be paid by the insurance company on behalf of the vehicle owner. The insurance company covers the damages up to Rs 7.5 lakhs.
Therefore, these are all the situations that are covered under a third party plan. These situations can lead to financial losses if you do not have a valid instance policy in place.
Coverage of Third Party Liability for Commercial Vehicles
A 3rd party car insurance for commercial vehicles provides coverage under the following circumstances:
- Covers legal and financial liability of the vehicle owner in case of bodily injuries or vehicle damage caused by the commercial vehicle to the third party\
- Covers the accidental death of the third party
- Damages to the property of the third party by the insured vehicle
What is Not Covered Under a Third Party Insurance Plan?
Like different insurance plans, some typical situations are not covered under a third party car insurance plan. These include:
- It does not cover the damages sustained by the insured vehicle due to any natural or artificial disasters like fire, storm, malicious activity, terrorist activity while in transit by rail, road, air, inland waterways/ lift elevator, landslide, or rockslide, etc.
- Gradual wear and tear of the car or its parts.
- Damage to tyres or tubes due to oil leakage.
- Any accidental loss or damage when the insured is under the influence of alcohol or drugs.
- Consequential loss or damage to the vehicle
- If a private car is used for commercial purposes.
- Driver without a valid driving license.
- Damage to the car due to nuclear war, radiation, etc.
- Any loss or damage when the policy is not in force.
Along with these exclusions, there can be other exclusions depending upon the insurer, so you must read the terms and conditions mentioned in the policy to know all the exclusions.
Why Choose RenewBuy?
Renew offers you a chance to get all the information regarding different policies offered by different insurers on one platform. You can compare plans, calculate the premium, buy a policy, and even renew the policy from the website within a few minutes. The advantages of using the Renewbuy website are:
The listings that you will find on the website are relevant and can be sorted based on your requirements. It is a transparent system where all the information is provided to the customer. You will be able to see the listings based on your filters, enabling you to make the right decision for yourself.
You will get all the updated information about the policies from the website. The information is updated from time to time so that the customers can stay up to date with the changes in the market.
The easy and convenient way of using the website helps you speed up the time you take to compare the insurances. You can compare multiple plans from different insurers seamlessly and choose the plan that you like.
The needs of the customers are catered to by the company. If there is any query that you might have, then you can contact the customer service team. All your questions will be answered, and the process of buying a policy will become easier for you.
Thus, choosing Renewbuy for your insurance needs is a wise decision, and you will get all the information you need to decide on this platform.
How to Buy a Third Party Insurance Policy Online?
Vehicles are an essential part of everyday life for so many people. Buying a new online third party car insurance is not a complicated process; in fact, it is straightforward. Anyone can buy a policy online by entering a few details, making the payment, and you can get the policy instantly in a few clicks. To buy an insurance policy, all you need is a smartphone or a laptop with an internet connection.
Buying a third party insurance for car online is one of the most convenient things due to advancements in technology. You need the below-listed documents to buy third party vehicle insurance:
Invoice of the vehicle
Valid Driving License
The steps for buying a third party insurance for car online include:
Visit the Renewbuy website (www.renewbuy.com)
Fill in the make and model of the vehicle
Fill in the purchase year of the vehicl
Click on the Instant Quote Button
You can also customize the policy according to the add-on covers that you wish to buy.
Compare plans, select, and pay for your desired policy
Thus, with these simple steps, you will have the policy with you in a few minutes. The whole process is easy and does not require too much time or effort.
Renew Third-Party Vehicle Insurance
Renewing your 3rd party car insurance policy on time is essential so that you can enjoy the benefits of the policy. Also, driving your vehicle on the road without a valid third-party liability insurance cover is illegal, and you might have to face punishment if you do that. So, always renew your third party vehicle insurance policy on time.
Documents Required for Third Party Vehicle Insurance Renewal
When renewing a policy, you can compare different third party vehicle insurance policies available in the market. You can check the plans offered by visiting the Renewbuy website and submitting all the needed information. Going online saves time and effort, and several facilities are being provided online for potential customers to understand the policy thoroughly.
Comparing and evaluating these plans helps you make an informed decision on the plan that is most suitable for you. The documents that you need for the renewal of your insurance plan are:
- Registration Certificate.
- Driving License
- Previous year insurance policy
- Previous year insurance policy
- Any other documents that the insurer might need
Note: To make the renewal process even swifter, one must keep the documents mentioned above ready. Having these documents handy will help fill out the details required for renewal and making the payment.
How to Claim Third Party Insurance?
You need to take a few steps if you want to file a claim under third party insurance. These steps are:
In case of death, the victim or heir of the victim (in case of death) can make an application against the owner of the insured vehicle for compensation.
Lodge an FIR
Once the application is made, you have to file an FIR with the policy and furnish all the information required by the policy. For receiving the compensation, keep the details of the FIR handy and the costs that the victim had to endure to get treated.
Contact the Motor Accidents Claims Tribunal
After the FIR is filed, the case needs to be taken to the MACT.
There is no limit to the compensation when it comes to claims under a third party insurance policy. The insurer pays the compensation amount decided by the MACT. However, in the case of property damages, the upper limit of the claim amount is Rs 7.5 lakhs.
Therefore, this is the process that you need to follow if you wish to file a claim under a third party vehicle insurance plan.
Documents Required to File a Claim
- Claim form (filled and signed)
- Original Driving License
- Registration Certificate of the Commercial Vehicle
- Copy of FIR
- Receipt of the Tax Paid]
- Copy of identity proof like Aadhar Card
- Insurance Documents
Comprehensive Insurance Plan vs Third Party Insurance Plan
A comprehensive policy and a third party insurance policy differ when it comes to the amount of coverage. A third party insurance plan covers damages or injuries caused to the third party by the insured vehicle. It also covers property damages and accidental death of the third party by the insured vehicle.
A comprehensive plan is quite extensive in case there is an accident. It protects the owner from financial loss due to damages caused to the insured vehicle because of natural and manufactured disasters.
|Third-Party Insurance Plan||Comprehensive Insurance Plan|
|Covers damages or injuries caused to the third party by the insured vehicle||Covers third party liability along with accidental damages caused to the insured vehicle|
|Covers property damages to the third party by the insured vehicle||Covers property damages to the third party as well as damages caused to the insured vehicle accidental and manufactured disasters|
|It is cheaper than the comprehensive plan||It is extensive, so it is expensive|
|There are no add-on covers available with this plan||You can buy add-on covers like Zero Depreciation Cover, Accessory Cover, etc. with this plan|
|This is compulsory under the Motor Vehicles Act, 1988||This is an optional plan that you can buy if you want extensive coverage for your vehicle|
How To Compare Insurance Policies Using Renewbuy?
The process of comparing policies on the Renewbuy website is simple. All you need to do is:
Go online and log on to the RenewBuy website (www.renewbuy.com).
Select your city and details about the commercial vehicle like its year of manufacturing, make, model, and variant.
Check the claim settlement history of the provider.
Select one of the providers that offer value for money pricing based on your preferences
The process is simple, and you will get the results in a few minutes. You can check the list of policies and decide the policy that suits your requirements.
Disadvantages of a 3rd Party Car Insurance Plan
A third party insurance plan comes with some disadvantages. These are listed below:
No Own Damages Cover
A 3rd party car insurance covers damages or injuries caused to the third party by the insured vehicle. It also covers property damages and accidental death of the third party by the insured vehicle. But what about damages caused to own vehicle? The damages caused to own a vehicle are not covered under this plan; the insured vehicle can also suffer significant damages in an accident. With third party insurance, you will have to pay for the repairs from your pocket. Thus, this can cause significant financial losses to the owner of the vehicle in case the vehicle is heavily damaged.
No Add-On Covers
Add-on covers enhance the scope of the policy and increase the coverage of the policy. That can be beneficial for you in the long run. With third-party insurance, you will not be able to buy any add-on covers like zero depreciation cover, roadside assistance cover, accessory cover, etc. These covers can be availed of with a comprehensive motor insurance policy only.
No Protection from Fire or Theft
Besides being involved in an accident, the vehicle is highly likely to get stolen or catch fire. None of these perils is covered under third party insurance. If your vehicle gets stolen, you will not receive any compensation under the plan. If your vehicle gets damaged due to a fire, you will not receive any compensation for that.
Thus, these are a few disadvantages that you need to consider when buying a third party insurance plan.
A third party insurance policy is essential if you want to drive your vehicle on the road as it is mandatory under the Motor Vehicles Act, 1988. It is essential to ensure that you have a valid insurance policy before driving your car so that you do not have to face a challan while you are on the road. Before buying a policy, it is essential to consider all the policy aspects and ensure that the policy you are buying suits all your needs. Moreover, you must check the inclusions and exclusions under your policy. Read the terms and conditions carefully so that you do not face any issues when filing a claim.