Cars have evolved from being objects of desire to necessities. In our fast-paced lives, a four-wheeler adds mobility and saves time that we would otherwise spend travelling by public transport. Buying a car is usually a big decision since it involves a sizable amount of money.
However, when you are driving on the roads, there is always a possibility of an accident or mishap. These incidents can damage your car or cause damage to a third person or third party property. In India, it is mandatory for car owners to have a Third-Party Liability Insurance Policy. If you need coverage for your vehicle, too, then you can opt for a comprehensive four-wheeler insurance policy.
Today, we will be discussing Third Party four-wheeler Insurance and talk about everything that you need to know about it.
When you buy a four-wheeler insurance policy, you receive financial protection against losses and damages caused due to a range of reasons covered by it. There are two broad categories of Car Insurance Policies:
- Third Party Liability Policy
- Comprehensive Policy
The Motor Vehicles Act, 1988 makes it mandatory for every car to have a Third Party insurance cover.
What is a Third-Party Liability Car Insurance Policy?
Even the most careful drivers can get into accidents and collisions. Such incidents can damage their vehicles, injure them, or cause damages to a third person or third party property. The law dictates that any such damage to a third party needs to be reimbursed by the car owner who causes the accident/collision. Depending on the accident, this can be a huge financial strain on the car owner. This is where a Third Party Car Insurance Policy comes in handy.
Who is a Third Party?
Car Insurance companies define parties to the policy as follows:
- 1st Party: It is the insured vehicle
- 2nd Party: It is the insurance provider
- 3rd Party: Anyone else who raises a claim for the harm and damages to the car that is caused due to the 1st Party
The Motor Vehicles Act makes it mandatory for all cars to have a Third Party Liability Policy to ensure that if there is an accident or collision, the affected people are financially compensated for losses or damages. Driving a car in India without a Third Party Car Insurance Policy is illegal.
Inclusions and Exclusions of a Third Party Liability Policy
When you buy a Car Insurance policy offering third-party liability cover, the policy offers coverage against damages to third-party property and physical injury or death of a third party.
It is important to note that a Third Party Liability-only policy does not cover any damages to your vehicle or physical injury to you during the accident. Any loss of your belongings is also not covered under this policy. You must keep this in mind when you buy car insurance.
How Much does Third Party Car Insurance Cost?
The Insurance Regulatory Development Authority of India (IRDAI) fixes the 3rd-party insurance price. Here are the existing rates of these policies based on the cubic capacity of the car. Here are the proposed rates for these policies from April 01, 2022.
|The engine capacity of the car||Premium Rates|
|Less than 1000cc||₹2094|
|Between 1000cc and 1500cc||₹3416|
|More than 1500cc||₹7897|
Add-on Covers and Third-Party Car Insurance
When you purchase a Comprehensive Car Insurance Policy, you can choose add-on covers to customise it as per your needs. However, when you opt for a third-Party four-wheeler insurance policy, these covers are not available. The coverage offered by these policies is usually fixed and limited to third-party liability only. Most add-on covers are for boosting own-damage protection.
When Should I Opt for a Comprehensive Car Insurance Policy?
While a Third-Party Car Insurance policy is mandatory, a Comprehensive Insurance policy is voluntary. Since it covers damages to your car and self, the premium of comprehensive plans is higher than third-party liability-only plans. Ensure that you assess the condition of your four-wheeler and its anticipated use before choosing between the two.
Make sure that you compare car insurance policies before signing the dotted line. If you want to update your third-party car insurance to a comprehensive car insurance policy, you can do so at the time of car insurance renewal. The process to renew a car insurance policy is simple and hassle-free.
Buying a Third Party Car Insurance policy is mandatory in India. It also ensures that you are financially protected against losses if your vehicle has a collision or an accident. While most insurance providers offer similar coverage, it is important to choose an insurance company that offers good service. Good Luck!