What is 3rd Party Liability Insurance?

“Covers legal liabilities for death, injury or property damage”

The third-party liability insurance is mandatory as per Indian Law. So, having third-party cover means a policyholder works in compliance with the legal rules and obligations. 

But what is 3rd Party liability insurance?

The 3rd Party Liability insurance is a necessary policy protecting the insured against Legal financial liability in case of injury, death, or property damage. In case an insurer meets with an accident, then the insurer provides financial assistance to pay the repair cost of the third-party property. It reduces the financial burden on the policyholder. But no coverage is provided to the insurance policyholder. 

What is 3rd party liability insurance: Key features! 

3rd party liability insurance provides basic protection to policyholders. It is also quite popular with the name liability-only or act-only policy. 

• No coverage for own vehicle 

The policy does not cover repairs to the insured person’s own vehicle. 

• Mandatory by law 

The insurance policy is mandatory according to the Motor Vehicles Act, 1988. 

• Bodily injury or death coverage 

The method is used to cover damage caused to the victim’s property by the insured vehicle. However, a specific amount is limited. 

• Legal liability coverage 

It covers legal fees, investigation costs, and compensation by the court to provide financial relief from any legal disputes. 

• Affordable Premium amount 

Since coverage is limited to only 3rd party damage, Premiums are required to pay low.

Exclusions 

• • If the driver is drunk, resulting in an accident  
  • When the driver is underage or does not have a proper license 
  • The accident seems to be a deliberate act 
• When the vehicle is involved in any illegal procedure

Uses of 3rd party liability insurance! 

• Accidents  

If an accident happens between two vehicles, the insurance policy will cover the repairs to the other person’s vehicle along with their medical bills. 

• Property damage 

If your vehicle collides with a building or fence, then again the insurer will cover all the costs required for repairing. 

• Body injury or death 

The policy also covers the legal compensation if you are the reason behind any injury or death to pedestrians or any other party. 

What is the importance of 3rd party liability insurance?  

Although it is necessary and basic third-party insurance, it provides peace of mind to the policyholders since they know they have financial protection against the damage that they cause to third-party individuals.

The third-party motor insurance secures the policyholder from any accidental risks.

How to claim the damage caused to a third party?

In the general case, the person is liable to pay for the damage caused to the third party. However, if an accident takes place, the policyholder should tell the insurance company at the earliest. Also, it is important to collect all the important information regarding the incident. The details should be provided:

• Accident details, including the date and time
• Policyholder and insurance details at the time of the incident
• Witnesses details
• Describe the visibility and weather conditions
• If possible, then take photographs of the evidence collected.
• Description of injuries sustained by driver or passenger