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Everything You Need To Know About Third Party Car Insurance


A quick look at the quotes provided by a car dealer and you will come across various components. The most common ones are the ex-showroom price, road tax, insurance, handling fees and so on. Though there might be some changes from dealer to dealer for these components, the ex-showroom price, road tax and insurance components remain the same throughout.

This simply signifies the importance of a car insurance policy. To make the matters a little bit clearer, the Motor Vehicles Act of 1988 mandates all vehicles to have a valid insurance to be able to legally ply on the roads. Thus, you see all the dealers offering car insurance as a part of the entire package. Though it is not mandatory to buy the same from a dealer but it’s a different topic altogether.

When you do set out to renew or buy a new car insurance for your car from Coverfox.com, there are two types of insurances that must deal with. A third-party car insurance and a comprehensive car insurance. All insurers that offer vehicle or car insurance, have these two offerings by default. As a matter of fact, the third-party car insurance is the mandate as per the Motor Vehicles Act of 1988.

A comprehensive policy, as the name suggests, is a more rounded product and offers a lot more. Thus, no points for guessing, that it costs slightly higher as well. It comprises of a third-party car insurance and adds a lot of additional features on the top of that.

Basics of Third Party Car Insurance

When you are driving around in a car, the worst possible outcome of the same would be an accident leading to the death of an individual. The lesser possible outcome would be the injuries that an individual incurs as a part of the incident. Then there is a probability of causing some damages to private and public property as well. And those compensations from you can easily burn a hole in your pockets.

It is at such times that a third-party car insurance thrives as a product. A third-party car insurance offers you protection any legal liability that arises out of accidents involving your car. The damages can include disability, injuries or death to third party individuals or damages to public or private property. Your insurer will compensate for all such occurrences. In short, you buy a coverage against any financial liability arising out of accidents related to a car.

There are a few basic requirements for the policy to kick into effect. The following are those.

  • The name of the owner or driver of the car is mentioned in the policy documents.
  • The owner or driver of the car who has the policy must have a valid driving license.
  • The owner or the driver of the car is the registered owner of the vehicle.

If any of the above is not met, the policy might not cover the situation that you are in.

Things You Should Know About Third Party Car Insurance

A third party car insurance is the minimum coverage that one must have to drive their vehicles on road. The IRDAI or the Insurance Regulatory and Development Authority of India is responsible for the premiums for a third-party car insurance. As per IRDAI, in 2017 the third party premium amount for a car not exceeding 1000cc should not exceed INR 2,055. The premium amount for a car between 1000cc and 1500cc should not exceed INR 2,863. Similarly, for cars having engine capacity to the north of 1500cc, the premium should not exceed INR 7,890. Of course, you would need to pay GST on the top of the premium charges.

A third-party car insurance will compensate for any minor injuries to serious fractures. Though the policy cannot compensate for physical damages, it will offer financial compensation. In the event of property damage, the third-party car insurance has an upper limit. The policy will offer compensation up to INR 7, 50,000 for any property damage. You do have the option of restricting the same by opting for a lower premium.

A third-party car insurance does not offer coverage for any claims related to contractual liability or if the vehicle was being driven by someone else. Any damages arising out of exposure to radioactive elements or nuclear perils.

A third-party car insurance is the most affordable car insurance policy that you can buy for your car. It offers the bare minimum coverage and is quite effective at that.

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