Why is it important to have third party car insurance?
Third party insurance is mandatory as per the Motor Vehicles Act, 1988. If there is a car accident, where your car is at fault, you are liable to pay for the damages to the property of the third party, and for the injury or death of the third party.
If you do not have a third party motor insurance, you would have to pay the claim costs from your pocket, as well as pay penalty for driving without a third party car insurance.
What is Third Party Car Insurance
Road Accidents in India - 2016, is a report by Ministry of Road Transport & Highways. As per the report, there are 55 road accidents, and 17 consequential deaths every hour in 2016. Third party car insurance is a risk cover, where the insurance companies compensate for the legal liabilities which are claimed by a third party, when the vehicle of the insured is at fault.
It is important to note here that the third party car insurance does not cover the insured or the damage to his/her car.
Third party motor insurance policy covers:
- Death, bodily injury, or disability of the third party
- Damage to the property of the third party
There is no limit on the liability covered for injury or death, but the limit for third party property is capped at ₹7.5 lakh by Insurance Regulatory and Development Authority of India (IRDAI). For damages exceeding this limit, the policyholders will have to pay the balance themselves.
Consequences of Not Having Third Party Car Insurance
As per the law, it is an offence to ply an uninsured vehicle. Third party car insurance is also called 'Act only' insurance. Third party car insurance needs to be taken while purchasing the vehicle. It is as important as a driving license, without which the car owner can be penalised. The penalty could include:
- Surrendering of driving license
- Suspension of your vehicle’s registration
- Fine and/or imprisonment
If you are buying a vehicle, get your third party car insurance now, you will not only be saving yourself from getting penalised but will also be insured against third party legal liabilities arising out of an accident.
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