Many people prefer to opt for comprehensive car insurance. However, The Motor Vehicles Act, 1988 specifies only third-party insurance is compulsory for Indians to own a car. If you are wondering what is third party insurance for car? Third-Party Insurance is the safety net that protects the vehicle owner against legal liability caused by the insured vehicle in the event of an accident.
Demerits of a third-party insurance
Third-party Insurance provides only a basic coverage against the financial liabilities arising from damage caused to a third party by the insured vehicle.
It does not cover any liabilities arising out of theft, loss or damage to the car.
Merits of a third-party insurance
There are plenty of advantages when it comes to third-party car insurance. Some of the most important ones are the following
- Obligatory – To drive on Indian roads, you must obtain third-party insurance for car. It is mandatory for all car owners to have this type of insurance.
- Accidents can be quite traumatic and disrupt the car owner emotionally while putting a strain on the finances. Basic third-party insurance takes care of any liabilities related to third-party damages and provides some relief.
- Premium is affordable – The third-party insurance is a basic necessity. Hence the premium is quite affordable. The IRDA reviews and fixes the premium for vehicles every fiscal year. For the fiscal year of 2018-19, the premium fixed are as follows.
Premium w.e.f. 16th June 2019
Less than 1000 cc
1000 cc – 1500 cc
More than 1500 cc
The total premium is determined by the base price, GST of 18%. Add-on is charged separately. Factors that are important in determining the total premium include:
- The third-party car insurance premium is solely dependent on the cubic capacity (CC) of the vehicle, with no other determinants like age or mileage taken into consideration.
- Coverage – Third-party car insurance provides the most basic coverage for a vehicle with an affordable cost of the premium. It provides cover against any third-party financial liabilities that arise, in case of damage or injury caused to the third-party person or property, by the policyholder.
- Past claims – The third-party insurance premium is not affected by any past insurance claims.
- The advantage with "no-fault liability." It means if the driver had not been careless or negligent of driving regulations and protocols, the insurer would pay the injured.
- Accidental death caused by the insured vehicle or significant injury is also protected by the insurance company
- Any damage to asset or property is also covered by this policy. Up to a compensation of Rs. 7.5 lakhs can be claimed as approved by IRDA.
Third party insurance can only protect against the claimant's requirement.
Why buying an online policy for car the best idea?
When you buy a new car, the dealer will refer you to a third-party insurance service. You can also purchase insurance online. Most people prefer to buy insurance online for the flowing reasons
- The convenience of use – Any online purchase comes with the benefit of completing the action at your convenience. It can be at any time of the day. And it can be done from anywhere in the world. No waiting in the cues, no hassle.
- Comparison – The online policy sellers offer you the best option of choosing your policy. Explore the add-on and choose the best one for your vehicle.
- Alerts – Keeping track of so many things is difficult. However, missing the expiration date can be detrimental for your interest. Opt for the reminder option, and you will get mail notification and SMS alerts as the day approaches.
If you are trying to renew your old policy, log in to the insurance website. Put your policy number in case of renewal, and make the necessary payment. If you are getting a new policy, you will also need your registration number for the vehicle.
Purchasing online insurance is easy. If your expiry date is coming, renew the policy online today. In case you miss the deadline, do not take your vehicle out. You will receive fines for missing the deadline.
To complete the buying process online, you can use your net banking facility. Credit and debit cards are also accepted.