What is Third-party Car Insurance?

Third-party Car Insurance refers to an insurance policy that covers third-party liabilities. In other words, it covers damages to the third-party (property/life) caused by your vehicle. However, this type of insurance plan does not offer coverage against damages to your car and the injuries/death of the car owner/driver. You must buy this basic car insurance cover to comply with the legal requirements.

Why do you need Third-party Car Insurance?

You should purchase a Third-party Car Insurance Policy for your vehicle, as it is mandatory as per the rules and regulations of The Motor Vehicles Act 1988. Driving your car without a Third-party Liability Policy is illegal. You can be penalised by the authorities for doing so. This policy saves you from legal liabilities and financial losses due to damage to third-party property and injury or death of a third party. Hence, it is crucial to buy this insurance plan.

How does Third party car insurance work?

Third-party car insurance works by insuring the policyholder against liabilities arising due to injury sustained by a third party or damage to a third party’s property by the insured car. In such a scenario, the third party will most likely demand compensation to treat injuries or repair damages from the car’s owner.In the case of third-party liabilities, a case will be filed and the owner’s car insurance company reimburses the third party. This is a simplistic explanation of how Third-party insurance works. The situation gets complex when you happen to crash your car into another vehicle. In almost all cases, there is a need for a First Information Report (FIR) to be filed with the police. Third-party cases are settled as per the Motor Accident Claims Tribunal.