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A Third-party Car Insurance Policy is the basic insurance every car in India must have under the Motor Vehicles Act, 1988.
If a car accidentally damages someone else’s vehicle, property, or injures a person, this policy pays for those costs. It does not cover your own vehicle, but it protects you from big expenses and legal trouble after an accident. You can think of it like a safety promise!
Third-party insurance is legally required for the vehicle owner to drive legally on the road. To know everything about the third-party car insurance policy, here is the right guide for you.
Third-Party Car Insurance Meaning
Third-party car insurance is the basic motor insurance made compulsory under the Motor Vehicles Act, 1988.
In simple terms, it protects a car owner from the expenses arising if their vehicle accidentally damages someone else’s property, injures, or causes the death of a third person.
It does not cover damage to the insured car, but it ensures legal safety for the owner. Also, it helps in avoiding heavy fines or compensation costs after an accident.
Key Features of Third-Party Car Insurance Policy
Here are the key features of third-party car insurance:
- Mandatory by law This third-party insurance is required under the Motor Vehicles Act, 1988, for all vehicles on Indian roads.
- Covers third-party damages This insurance policy pays for damage caused to another person’s vehicle or property.
- Covers injury or death of a third person The third-party insurance provides financial support if an accident leads to bodily injury or death of a third party.
- No coverage for own vehicle damage You will get protection against third-party liabilities, not for your car’s repair costs.
- Affordable premiums Third-party car insurance premium rates are set by IRDAI. This makes the policy budget-friendly.
- Legal protection It helps to avoid fines, penalties, and compensation burdens related to third parties after an accident.
What does Third-Party Insurance Cover?
Here are the inclusions of third-party vehicle insurance:
- Damage to another person’s vehicle
- Damage to third-party property
- Injury caused to a third person
- Death of a third person
What does Third-Party Insurance Not Cover?
Here are the exclusions of third-party vehicle insurance:
- Damage to the insured car
- Injury to the policyholder or passengers
- Theft of the insured vehicle
- Fire or natural disaster damage to the insured car
- Drunk driving or illegal driving incidents
- Driving without a valid licence
- Mechanical or electrical breakdown
- Wear and tear or ageing of the car
Note: Third-party insurance has no add-ons. However, Personal Accident Cover for the owner-driver is mandatory by law.
Why is Third-Party Vehicle Insurance Important?
Third-party vehicle insurance provides essential legal and financial protection. Here are some other benefits explained in a better way:
- Meets legal requirement It is compulsory under the Motor Vehicles Act, 1988, so it keeps your vehicle legally safe on the road.
- Covers third-party losses If the car causes injury, death, or property damage to someone else, the policy pays for those expenses.
- Reduces financial burden Accidents can lead to high compensation amounts. Third-party insurance protects from paying these costs out of pocket.
- Affordable premium The premium is low because it covers only third-party liabilities.
- Avoids fines and legal trouble Driving without this insurance can lead to penalties, challans, and legal issues.
- Easy to understand and maintain The third-party car insurance policy is simple, with no add-ons. This makes purchase and renewal convenient.
Premium Cost of Third-Party Vehicle Insurance
IRDAI determines the premium cost of third-party vehicle insurance. It depends mainly on the vehicle’s engine capacity in the case of petrol cars, and on battery size for electric cars.
Here is more information about the premium of third-party car insurance:
1 Third-Party Premium Rates for Private Petrol Cars:
| Engine Capacity | Annual TP Premium |
|---|---|
| Up to 1000 cc | Rs. 2,094 |
| 1000 cc to 1500 cc | Rs. 3,416 |
| Above 1500 cc | Rs. 7,897 |
1 Third-Party Premium Rates for Electric Cars:
| Battery Capacity | Annual TP Premium |
|---|---|
| Not exceeding 30 kW | Rs. 1,780 |
| Exceeding 30 kW but not exceeding 65 kW | Rs. 2,904 |
| Exceeding 65 kW | Rs. 6,712 |
Fine for Third-Party Car Insurance Policy
Driving in India without mandatory third-party insurance is a legal offence under the Motor Vehicles Act, 1988. This can lead to fines, imprisonment, or both.
Refer to the table below for clarity:
| Type of Offence | Penalty | Imprisonment |
|---|---|---|
| First Offence | Rs. 2,000 | Up to 3 months |
| Repeat Offence | Rs. 4,000 | Up to 3 months |
Conclusion
Third-party vehicle insurance is a basic yet important cover that every vehicle must have in India. It protects against legal and financial liabilities after an accident and helps ensure safe and lawful driving.
Even though it does not cover your own car, it offers essential support by handling third-party expenses and keeping you protected on the road.
Protect yourself from legal and financial liabilities arising from third-party claims. Get the policy now with Square Insurance.
FAQs
Third-party car insurance is a basic motor insurance policy that covers damage or injury caused to another person, vehicle, or property. It does not cover the insured car.
The meaning of third-party car insurance is simple: it protects the vehicle owner from legal and financial liabilities that arise when their car harms a third person or property.
Third-party vehicle insurance is used to cover legal liabilities, such as third-party property damage, injuries, or accidental death caused by the insured vehicle.
Third-party insurance covers damage to another vehicle, property damage, injury to a third person, accidental death, and legal liabilities related to these events.
Yes. It is compulsory under the Motor Vehicles Act, 1988, for every vehicle to have a valid third-party insurance policy.
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