Every car-owner knows they must get insurance for their vehicle. If you’ve ever purchased a car insurance policy, you will be familiar with the term third-party liability. So, what exactly does it mean? Let’s find out.
The Three Parties
When you buy car insurance, there are typically three parties involved. The first party is the car owner and the policyholder. So, you are the first party. Next, you have the insurance company, which is the second party. They promise to help pay for repairs to your vehicle in exchange for an annual premium. Finally, you have the third party, which refers to any other individual involved in an accident. The person may get hurt, or some of their property could get damaged.
Now that we have established who the third party is, we can understand third-party car insurance. A third-party liability policy is a legal contract between you and the insurance company. You agree to pay your premiums and they agree to pay for the damages caused to a third party or their property after an accident. With a third-party liability policy, the policyholder does not receive any benefit. With a comprehensive car insurance policy, the policyholder gets the benefits.
Your third-party liability car insurance policy will help take care of:
If a third-party individual gets hurt during an accident, you are legally liable to pay for their medical bills. Your third-party insurance plan will help pay for these medical expenses on your behalf.
Even a minor accident could damage your car as well as somebody else’s car. If you’re the one at fault, you have to pay for the other person to repair their vehicle. With a third-party liability policy, you won’t have to shell out too much. Your insurance plan will help cover the cost of repairs.
Sometimes, you may lose control of your car and crash into somebody’s property, like their house boundary wall. If this happens, you are legally bound to pay for the repairs to the property. Your third-party insurance policy will help you pay for these damages.
Why Do I Need Third-Party Liability Insurance?
Over the last few years, there’s been a rise in the number of vehicles registered in India. As the roads get crowded, accidents are bound to occur more frequently. Very often, third-party individuals may get hurt in an accident despite not being at fault. These people are well within their rights to ask for compensation for their loss. Bearing this in mind, the Indian Government made it mandatory for all vehicle owners to have at least third-party liability insurance in the Motor Vehicles Act, 1988. These policies ensure that road accident victims get what’s owed to them while protecting the policyholder’s finances.
Every insurance provider in India offers third party bike insurance and car insurance plans. You can even opt to purchase a comprehensive policy from Edelweiss General Insurance that provides coverage for you and all third-party individuals as well.