Third-Party Car Insurance Coverage Explained

In the case of an accident, liability arising from the third-party can put a significant dent in your pocket. To ensure protection against the same, every car owner must buy a third-party car insurance policy. Several reputed insurance providers in the country have come forward with effective third-party insurance plans, which provide an insurance cover to individuals against such incidents. Let us understand third-party insurance coverage in detail.

What is third-party coverage?

If you hit someone’s car and cause them damage, then your insurer will bear all medical and repair expenses for the third party. Here, the policyholder is the first-party, the insurance provider is the second-party, and the individual involved in the accident is the third-party.

Third-party policy is compulsory in India

Third party car insurance is mandatory in India. When buying a new car, you also need to buy a car insurance plan. As per the Motor Vehicles Act, 1988, if you’re driving a vehicle on Indian roads without a valid insurance plan, then you might face serious legal ramifications.

Inclusions of third-party insurance plan

Under a third-party policy, the insurer covers the liabilities of the policyholder in case the latter is responsible for any injury or loss to a third party because of an accident.

Always remember to compare multiple plans online while buying a car insurance plan. Now, let’s have a thorough look at the coverage offered by this policy and know the inclusions of third-party insurance in detail:

1. Damage to property

Even if you cause severe damage to the property of the third-party, you do not need to worry about the expenses that will arise because of the mishap. The insurer will pay for the damages caused to the third-party. Property damage cover is capped at Rs. 7.5 lakh in such scenarios.

2. Death of a third-party

If an accident leads to the death of the third-party, you need not worry because the insurer will cover the compensation to the deceased’s family/nominee. In the case of accidental deaths, the insurance claim is judged as per court tribunals. The compensation is determined by the court based on the consequences of the unfortunate loss that factors data such as the earning capability of the deceased third-party.

3. Partial or permanent disability

At times, accidents can result in the disability of the third-party. If the third-party is subjected to partial disablement that can be recovered with time, such as fractures, the insurer will provide the necessary coverage in terms of medical expenses to the affected individual(s). However, if the third-party is subjected to permanent disablement, then a pre-assured sum is offered by the insurer.

4. Bodily injuries

Medical coverage is provided for all types of physical injuries no matter the severity of the wounds. There are a few reputed insurance companies that understand accidents cannot be controlled. The insured’s stress is effectively reduced when financial support is offered to them.

These are some of the main benefits of third-party insurance. With a bundled personal accident cover, the above insurance also offers excellent coverage to the insured during accidents.

In a nutshell, the third-party car insurance supports low premiums and no-fault liability. It also compensates bodily injury as well as property damage to the third-party.

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