Shedding light on third-party liability in auto insurance
What's the story
On the road, there's always a chance you might accidentally hurt someone else or damage their stuff.
Third-party liability in car insurance is a legal requirement for all vehicle owners in India.
It provides financial coverage if you're held responsible for damages or injuries to a third party.
This coverage does not offer any protection against damages to your own vehicle.
So, how does this all affect your driving?
Coverage
What does third-party liability cover?
Third-party liability insurance is designed to cover expenses related to third-party property damage or bodily injury/death of a third party resulting from an accident involving your vehicle.
So, if you accidentally crash into someone else's car or hit a pedestrian, your insurance company will pay the third party on your behalf.
However, remember, this cover does not extend to damages to your own vehicle.
Limits
How much coverage do you need?
The Motor Vehicles Act sets a minimum coverage limit for third-party liability insurance. However, given the increasing costs of medical care and repairs, it is often beneficial to choose coverage that exceeds the legal minimum.
The ideal coverage amount is influenced by several factors, such as your driving patterns and the regions where you regularly operate your vehicle.
Cost
Premiums explained
The premium for third-party liability insurance is regulated by the Insurance Regulatory and Development Authority of India (IRDAI) and depends on your car's engine capacity.
Currently, premiums start at a minimum of ₹2,072 for cars with an engine capacity under 1,000 cc, but they increase substantially for larger vehicles.
Note: Although choosing higher coverage may raise your premium a bit, it offers greater financial security by covering potential liabilities.
Claims
Claim process simplified
After an accident with a third party, promptly notify your insurer.
This involves lodging an FIR at the nearest police station and providing necessary documents such as insurance proof, registration details of both vehicles, and any additional info your insurer requests.
Your insurer then evaluates the claim and pays the third party.
This knowledge is essential to safeguard yourself from financial liabilities arising from accidents on Indian roads.