Third-party car insurance cover offers to protect the car owner against all kinds of legal liabilities arising out of non-deliberate involvement of the car or any of the four-wheelers that may amount to an accident causing death, injury, or property damage to the third party involved.
In some cases, it may also damage the owner’s driver. So, the third-party car insurance cover helps the insured mitigate the financial and mental loss against any unforeseen situations which in turn fetches peace of mind along with the possession of the car.
Apart from that, the third-party liability cover is also a legal statutory requirement according to the Indian Motor Vehicles Act. Now- a day’s people look forward to holistic car insurance cover.
The car insurance cover has got two variants. The first one covers its own damage and the second covers the damage to the third party.
A major portion of the premium which is 90% is paid towards covering the own damage component while the remaining 10 % of the premium component is paid towards the third party liability cover.
In case, if people do not want to opt for the comprehensive cover which includes both third-party liability and own damage benefits, they can go for a standalone third-party car insurance cover, but in both cases, the third-party car insurance cover is expected to rise in the coming years owing to its mandate nature as per the act.
Important Facts about Third Party Car Insurance
There are certain facts about this type of insurance. Let us try to understand some important facts about third-party car insurance and try to know why we need it:
The customers can buy third-party car insurance only if/her vehicle is registered with Regional Transport Authority in India (at the time of insurance one has to produce the legal document).
In the case of third-party car insurance, generally, the validity of the plan is of one year, which can be renewed before the due date.
1. The amount of premium in case of the third party car insurance cover depends on the make/model/type/nature of the job (residential, commercial, or racing/sports cars. The customers or the vehicle owners cannot skip the third-party car insurance even if you or your driver is a professional.
2. It does not matter whether you are excellent at driving because third-party car insurance is a legal mandate issued as per the Indian Motor Vehicles Act, 1988. This act asserts that if any accident occurs, which might be or might not be because of your fault, but you may be held liable for damage caused to the third party. In such cases, third-party car insurance becomes a breather.
3. In India, it is compulsory for insurers to offer minimum third-party car insurance to ensure the safety cover of all registered vehicles. Thus, the insurance market is flooded with a lot of options, IRDA has issued a provision of portability of third party car insurance cover, wherein the insured can also get their third party car insurance policies ported if he/she is not satisfied with the existing insurance company and its procedures.
As IRDA revises its premium rates every year owing to the number and amount of claimers precisely known as the Cost Inflation Index (CII). According to a report published by The Government of India, Ministry of Finance (Department of Revenue), Central Board of Direct Taxes, the CII has increased from 1081 to 1125 from the financial year 2015-16 to 2016-2017.
In the financial year 2016-2017 which is supposed to end on 30th March, the premium hike was around 40% in the case of third-party car insurance. The new financial year that is 2017-2018 is also expected to witness the same pattern which makes it quite an obvious fact that the third-party car insurance premium cover will surely go up.
Advantages of Third Party Car Insurance Policies:
1. In an ideal case, the third party car insurance is supposed to provide cover the death, injury (minor, major), damage to the third party, accidental death, injury, or permanent disability to the owner’s driver.
2. The weird traffic sense on the road does not land the owner into a total panic situation. This facilitates peace of mind, and one can feel relaxed while driving.
3. The availability of online third-party car insurance makes it feasible for the insurer to process the claims in a simpler and hassle-free manner.
4. You may buy a motor insurance policy online without any hassles and get quick policy issuance.
There are various insurance companies available in the market and depending upon your usage; you can always get third-party car insurance from any of the insurance companies available in India.
Some of the insurance companies offering third-party car insurance in India are HDFC ERGO General Insurance Co. Ltd, Bharti AXA General Insurance Co. Ltd, ICICI Lombard General Insurance Co. Ltd, and TATA AIG General Insurance company ltd., Oriental Insurance Co. Ltd, New India Assurance Co. Ltd., etc.