What is Third Party Insurance
Vehicle insurance is a contract between the insured vehicle owner and the insurance provider. It protects the owner against losses claimed by the third party. The most commonly purchased vehicle insurance is third-party insurance.
The Third-party bike insurance or motor insurance is liability insurance that supports you financially to pay for the claims made by another party in case of an accident caused by your vehicle. The third party can be the driver or pedestrian who caused injuries or damages in their vehicle.
Following are the seven points about third party insurance that you should know:
- Parties Involved
In Third-party insurance, three parties are involved:
an insured (first-party), an insurer (second party), and another (third party).
It is called third-party insurance because the beneficiary of the insurance is a third party only.
- The Premium Amount
The premium of third-party insurance is calculated as per the rates set by the Tariff Advisory Committee (a part of the insurance regulator in India – IRDA). Therefore, you will find uniformity in the cost of a bike/motor insurance policy. However, the features of a policy may vary with different insurance companies. Take a look at various motor insurance policies on Bajaj Finserv website.
- The compensation amount
The compensation to the third party largely depends on the accident victim’s financial status and earning capacity. The court will decide the amount in case of the demise of another party.
- What it covers
A third party insurance covers:
- Repairing costs for damages to the third party vehicle caused by you.
- Hospitalization expenses for injuries to a third party caused by the insured vehicle.
- Compensation to the family in case of an accident caused the demise.
- Damage to the third party property
- Permanent disability to the third party
- And legal consent in case of any injury to someone due to an accident caused by you.
Thus, it covers all the third-party liabilities towards you.
- Who can file the claim and where
Under the Motor Vehicles act 1988, the victim can file the claim against the insured vehicle owner in a jurisdiction at the place of the mishap or where the vehicle owner resides or where the victim resides.
A victim can make a claim only if he/she carries a specified minimum amount of bodily injury or damage to the vehicle or property.
- Police Complaint
After filing the claim, the victim has to file a complaint at the police station. You need to submit details of the insured vehicle owner, registration number of the insured vehicle, name and address of the witness.
- Documents Required
The victim needs to submit the FIR copy and bills of expenses incurred by him/her due to the accident caused by the insured vehicle.
What is Not Covered in a Third Party Insurance
- It doesn’t cover the damages to the insured vehicle itself.
- Compensation against the claim can be once only. If you indulge in an accident again, you have to bear all claims made by the third party.
- The existing tariff covers the maximum legal liabilities of 7.5 lakhs. The amount above this limit has to be borne by the insured party.
Thus, third-party insurance is not only mandatory on the legal consent but necessary for your peace of mind also. There is another option also available for you for better coverage of financial losses.
Third-party bike insurance or motor insurance is just a basic policy that can save you from financial losses raised by another party. If you want to protect yourself from financial burden causing damages to your vehicle or injuries to yourself, you need a comprehensive policy. You can find the best suitable motor insurance policy for your vehicle at Bajaj Finserv website.
A comprehensive policy covers losses or damages due to accidents, fire-ignition, theft, natural disasters, and other unforeseen or unfortunate incidents. Such coverage is besides third-party liabilities. Thus, the better the range of your insurance policy, the lower the financial burden you will have to bear.