In-Depth Guide About Third-Party Car Insurance

Driving without proper insurance can be a risky affair financially and legally. In India, having third-party car insurance is mandated by law. The Motor Vehicles Act of 1988 makes insurance mandatory for anyone who owns and drives a car. However, in the year 2018, almost 54% of the vehicles on Indian roads were uninsured, which is concerning.

Being caught driving without insurance can cost you fines, suspension of your license, and imprisonment. However, besides protecting you from these legal repercussions, third-party car insurance can also safeguard you from heavy financial losses.

In this blog post, we explore the critical features of third-party car insurance and why you need to have one according to the law. 

What Is Third-Party Car Insurance? 

Imagine driving through the city, and despite your best efforts, you accidentally bump into another car at a traffic light. Though this was a slight mishap, you will now have to pay for the repairs of the other vehicle. Car insurance helps you avoid this by providing financial protection in accidents. 

Third-party car insurance is a type of vehicle insurance that covers the costs if you are responsible for an accident. It takes care of expenses related to injuries or the damage you cause to another person or their property. It ensures that victims of an accident receive appropriate compensation for their medical care and vehicle repairs. 

However, please note that third-party car insurance benefits do not cover damages caused to your car or the expenses to treat your injuries. For this, you would need comprehensive car insurance. 

Why Should You Get Third-Party Car Insurance as soon as Possible?

1. Legal compliance and avoidance of penalties

First, you must have third-party car insurance because you are legally required to. Without this insurance, you could face fines, penalties, and even jail time. The law ensures that you cover the costs if you accidentally cause damage to another’s vehicle, or property or injure or kill someone while driving. It provides basic levels of financial protection for victims of accidents. 

2. Financial protection against Third-party liabilities

Accidents happen, and when they do, costs can mount up. This insurance protects you from the financial hit of third-party liability coverage and covers repairs, medical bills, and other damages. It ensures you’re not paying out of pocket for incidents you’re liable for.

As per the Insurance Bureau of India, the distribution of claim reasons and average claim amounts in the country is as follows: 

For Third-party liabilities : 

The top reasons for third-party damage claims include the following:

• Injury: 67.43%
• Death: 28.45%
• Personal accident / Property damage / Other: 4.12%

According to the same report, the average value of claims is:

• Avg claim amount for reported deaths: ₹9,79,596
• Avg claim amount for reported injuries: ₹2,61,630
• Avg claim amount for reported property damage: ₹2,27,681^[2]

With the right third-party insurance, you can avoid such financial liabilities. 

3. Fixed premium rates

Third-party insurance is pocket-friendly. The Insurance Regulatory and Development Authority of India (IRDAI) fixes the premium rates for third-party car insurance. The premium is based on the cubic capacity of the car engine. Regardless of which insurer you get your insurance from, you must pay the same premium for basic third-party insurance. This makes third-party insurance affordable and accessible to all car owners. 

Premium rates of Petrol/Diesel cars :

Premium rates of Electric cars :

1. Peace of mind

Knowing you have this coverage and necessary car insurance benefits offers peace of mind. It is comforting to know that if something goes wrong, you won’t face the financial repercussions alone. 

2. Simple and quick process

Getting covered is easier than you might think. With platforms like PhonePe, you can complete the process of getting car insurance online in just a few steps and with no paperwork. 

Key Takeaways

Third-party car insurance benefits you in multiple ways, including legal compliance, financial protection, and peace of mind. It is a quick but efficient way to ensure you are protected in an accident. As responsible drivers, we recommend you do not miss getting third-party car insurance today!