Third-party Car Insurance: What All Does it Cover?

As per the Motor Vehicles Act of 1988, every car owner in India should carry a valid third- party insurance before riding their vehicle on the road. Moreover, as per a recent Supreme Court announcement in September 2018, new car owners are now required to purchase the third-party insurance for three years at once. After completion of 3 years, they can then renew the policy on an annual basis.

But what is a third- party insurance? As the name suggests, the third- party insurance covers your legal liabilities towards third parties involved in an accident with you. The third-party can be a person, vehicle, or property.

Let us have a look at what all does a third- party insurance covers in detail-

1. Property Damage

Car accidents that damage someone’s property is covered under third- party insurance. If you’ve been in a crash where you damaged someone’s property, your insurance will pay for the losses.

Damages of up to Rs. 7.5 lakhs are covered under third-party insurance.

2. Injury Claims

Reports suggest that more than 1 lakh people die on Indian roads every year. While this number itself is massive, the number of injuries due to car accidents is significantly larger. So, if at all you’ve been involved in a road accident where someone gets injured, the third- party insurance will cover the medical bills for such injuries.

No matter if a third-party has suffered from small cuts and scratches or severe fractures, the insurance will keep you financially protected. Unlike the third- party property damage cover, there is no maximum limit on the claim amount in case of injury.

3. Permanent Total Disability

Even if a third-party suffers from permanent total disability due to an accident involving you and your car, the third- party insurance will pay the medical bills and compensation.

This can include loss of body parts, paralysis, and several other conditions that can make a person totally disabled permanently.

4. Partial Disability

Car accidents which result in partial disability are also covered by third-party insurance. This includes cover for broken bones, minor whiplash, strained muscles, and a host of other conditions.

If you’ve been in a car accident and the third-party has suffered from a partial disability, your insurance provider will pay the medical bills.

5. Death

If there has been a major car accident which has resulted in someone’s death, your third-party car insurance will offer death compensation.

While someone’s life is surely not something that can be valued with money, the compensation offered by the insurance provider does provide some relief. This coverage is also unlimited, and the coverage amount is calculated based on the age of the deceased, their earning capacity, etc.

The third-party insurance is mandatory for car owners due to the vital role the insurance policy can play in keeping a car owner protected at least financially in case of an accident involving a third-party. So, purchase a third-party insurance carefully and renew the policy on a regular basis to avoid penalties and keep yourself protected.

As per the Motor Vehicles Act of 1988, it is compulsory for every car owner to have a valid third- party insurance in India. But what does this type of car insurance cover? Read this post to find out.