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.webp&w=1920&q=75 "What is Third-Party Insurance?")
An accident can harm not only you but also another vehicle, person, or property. Third-party insurance exists to protect the insured vehicle owner from financial loss or legal liability caused by such damage to others.
In India, this cover is mandatory for all vehicles under the Motor Vehicle Act 1988, which makes it an essential part of legal driving. It pays for injury, death, or property damage suffered by a third party in an accident involving your vehicle. Without this protection, even a small mishap could lead to heavy expenses or legal trouble.
This blog will help you understand third-party insurance, which is important for every vehicle owner.
What does Third-Party Insurance mean?
Third-party insurance is a type of motor insurance that pays for damage or injury caused to another person, their vehicle, or their property in an accident involving your vehicle.
It does not cover repair costs for your own vehicle. Instead, it helps you avoid legal trouble and large expenses when someone else suffers a loss.
In simple words, third-party insurance keeps you financially safe if you harm someone or their property in an accident.
Why is Third-Party Insurance Mandatory in India?
Third-party insurance is compulsory in India because it protects people who may get hurt in an accident and makes sure vehicle owners take financial responsibility for any damage they cause to others.
Here are some additional points to explain:
1 It Protects Other People on the Road
If your vehicle harms someone or damages another person's car, bike, or property, third-party insurance pays for their losses. This helps accident victims to get quick support to recover money on their own.
2 Required by Law
Indian motor laws clearly state that every vehicle must have at least third-party cover before driving on public roads. The rules and premium rates are set by the Insurance Regulatory and Development Authority of India so that the process stays fair.
3 It Saves You From Paying Huge Amounts Yourself
Accidents can be expensive. Medical bills or legal compensation can run into lakhs or more. Without insurance, you would have to pay everything from your own pocket. Third-party insurance protects you from this sudden financial shock.
4 It Helps with Legal Cases After an Accident
In serious accidents, courts or tribunals decide the compensation amount to be paid. A third-party insurance ensures that there is proper financial support to settle such cases.
Third-Party Insurance Coverage List
Here are the expenses that third-party insurance covers:
- Injury or death of another person
- Damage to third-party property
- Legal expenses and court cases
What Does Third-Party Insurance Not Cover?
Here is the list of damages and expenses that third-party insurance excludes:
- Damage to your own vehicle
- Personal injuries to the owner-driver
- Drunk driving or illegal use
- Wear and tear
Third-Party Insurance Premium Rates for Two-Wheelers and Private Cars in India
This table shows third-party (TP) premium rates in India as notified by IRDAI (Insurance Regulatory and Development Authority of India):
| Vehicle Category | Annual TP Premium (Approx.) |
|---|---|
| Two-Wheeler up to 75 cc | Rs. 538 |
| Two-Wheeler from 75 to 150 cc | Rs. 714 |
| Two-Wheeler from 150 to 350 cc | Rs. 1,366 |
| Two-Wheeler more than 350 cc | Rs. 2,804 |
| Car up to 1000 cc | Rs. 2,094 |
| Car from 1000 to 1500 cc | Rs. 3,416 |
| Car with more than 1500 cc | Rs. 7,897 |
| Electric Car up to 30 kW | Rs. 1,780 |
| Electric Car from 30 to 65 kW | Rs. 2,904 |
| Electric Car with more than 65 kW | Rs. 6,712 |
- EV premiums are based on battery power (kW) instead of engine size (cc).
- These are base TP rates as per the IRDAI's guidelines. Actual premiums on your policy can differ after adding GST and other adjustments.
Benefits of Third-Party Insurance
Below are the benefits of buying third-party insurance in India:
- Saves you from paying big accident costs Medical bills or repair costs for others can be very high. This insurance pays for them instead of you.
- Protects you legally If a case goes to court, the policy helps handle the legal process and expenses.
- Helps injured people get compensation It ensures the affected person receives money for treatment or loss.
- Low-cost insurance option It is usually cheaper than full insurance plans.
- Mandatory to drive on Indian roads This cover keeps you legally compliant while driving.
Third-Party Insurance vs Comprehensive Insurance vs Standalone Insurance
Here is the table showing the difference between third-party, comprehensive, and standalone insurance:
| Aspect | Third-Party Insurance | Comprehensive Insurance | Standalone Own-Damage Insurance |
|---|---|---|---|
| Coverage | Third-party only | Third-party + Own vehicle | Own vehicle only |
| Cost | Lower | Higher | Medium |
| Best Suited For | Old or rarely used vehicles | New or costly vehicles | Vehicles with separate TP cover |
| Claim Flexibility | Limited | Flexible | Own-damage only |
| Fulfills Legal Compliance | Yes | Yes | No (TP cover needed separately) |
Conclusion
Third-party insurance is the most basic and legally required motor cover in India. It protects you when your vehicle causes injury to someone else or damages their property. While it does not pay for repairs but helps you to avoid heavy legal and financial trouble after an accident.
If you want only legal compliance at a low cost, this cover can work well. But for wider protection and peace of mind, you may consider upgrading to a comprehensive plan.
Connect with a customer care executive at Square Insurance today to keep yourself legally covered and financially secured on the road. Our experts are here to guide you in choosing the right motor insurance and stay protected at every step.
FAQs
Third-party insurance is a basic motor insurance that pays for injury, death, or property damage caused to someone else by your vehicle.
It can be defined as insurance that protects you legally and financially when your vehicle causes loss or harm to another person or their property.
The inclusions of third-party insurance include injury or death of another person, damage to their vehicle, destruction of property, and related legal expenses.
Yes, it is enough to meet legal requirements, but it does not cover damage to your own vehicle. To get complete coverage, it is advisable to get comprehensive insurance for your vehicle.
Third-party insurance is important because it protects you from large compensation costs and keeps you legally compliant while driving.
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