Why Third-Party Liability Is Important In Car Insurance?

8 min read Posted on 01 July 2024

Motor third party liability insurance is a legal requirement as per the Motor Vehicle Act, 1988. If you own or drive a motor vehicle, you will need it to stay on road. The coverage protects you from the liabilities resulting from lawsuits, accidents, financial loss or damage to property. Most of the insurance providers offer it as part of the primary car insurance. If you go for standalone third party liability insurance, your insurer may even add a comprehensive car insurance policy to it.

Certain companies may include a personal accident cover along with their third party liability insurance. Some may go further; may add collision cover. In this policy, the insurer compensates for the loss incurred due to collisions that most of the time is accidents.

Why a third party liability car insurance?

Given below are some of the benefits your third party liability car insurance coverage has in store for you.

• Offers you legal protection and eases your financial burden: Your coverage here eases your financial burden in the instance of injury or disability to a third party. You don't even have to worry about property damage to the third party. Your insurer will take care of it. Remember, the beneficiary here is neither you nor the insurance company, but a third party. But it is a must-have for peace of mind as a driver.
• Fast and simple process: Getting third party car liability insurance is a breeze. You can get it at your own convenience. Buy it online or from your insurance provider.
• It is cost-effective:You may add third-party car liability insurance into your main coverage. Or it can be bought separately. Whatever is your choice, it is the cost-effective option that ensures peace of mind. You don't have to worry about anything that may happen to a third party from your vehicle.

Points to remember

Remember, having only third party liability only insurance may do more harm than good. Certain companies charge extra in such instances. This happens because repairing a car is a costly affair. Besides, it is of no use if your car gets stolen. The same is the situation if you are the one who caused the accident. If you are responsible for the mishap, you alone would have to bear the expense of repairing the vehicle.

The premium

Premium for third party car insurance is determined by the Insurance Regulatory Development Authority of India. And it remains the same for all companies. But it may vary based on your car's engine capacity.

Filing a claim

A few key steps can make the whole process less stressful when filing a third-party car insurance claim in India. First, right after the accident, gather the basic information you’ll need. Exchange contact and vehicle details with the other party involved.

If possible, take photos of the accident scene and any damage to both vehicles, which can help support your claim later. File a police report for the incident.

Once you’ve got the immediate details sorted, inform your insurance provider as soon as possible. Your insurer will guide you on the next steps, but expect to fill out some forms and provide supporting documents.

In India, third-party claims are a bit different because they often go through a Motor Accident Claims Tribunal (MACT). The tribunal decides how much compensation the third party (the person you hit) should receive, based on the circumstances and damages. You’ll likely need to attend hearings or provide statements, as the tribunal will assess evidence from both sides. Your insurance company typically helps with legal representation.

Lastly, give accurate information, as insurance companies do their due diligence. Any inconsistencies could backfire.

Disclaimer: The content published in this article is intended solely for the readers' informational purposes and should not be relied upon for personal, medical, legal, or financial decisions. It is advisable to seek advice from a qualified professional regarding specific concerns. The details provided regarding the plan are for reference purposes only. Please visit the insurer’s website for the latest updates on the plan. The company does not guarantee suitability, reliability, timeliness, or accuracy of the information, services, or any other aspects mentioned in this regard for any purpose. We do not endorse any insurance company or insurance product provided by any insurer.