Wednesday, 24 January 2018

How third Party Liability Car Insurance works

We live in busy times, with commuters pressed for time continually struggling to gain pace on increasingly jam-packed roads. It’s that all too familiar recipe for disaster we’ve all caught a whiff off at some point and that we hope we never have to taste. But let’s be real, road accidents have become as familiar an occurrence as traffic jams, and so it’s best to be prepared for the worst-case scenario. That’s where Third Party Liability Car Insurance comes in. Also referred to as ‘act only cover’ and ‘motor third party insurance,’ third party insurance is a risk cover enacted as a mandate by the Motor Vehicle Act of India. Just having third party insurance, however, is little use unless you’re aware of all it encompasses and serves you with. Here is all you should know about third-party liability car insurance…

What Third Party Liability insurance for cars actually means

As the name suggests, a third party insurance policy provides cover to the insured person against claims of losses made by a third party that the insured person’s car has been in an accident with. This type of insurance, depending upon the clauses involved, may or may not cover for both bodily harm and loss of property. Note that the insured person is responsible for losses incurred by him and gets no cover for the same from the insurance company, irrespective of how they came to be.

How Third Party Liability insurance for cars works

Think of two cars that have the misfortune of being involved in an accident wherein the driver/passenger in car B suffers physical injury or damage to property and decides to press charges against the driver/owner of car A. In this scenario, the third party liability car insurance held by the driver/owner of car A would secure him/her against the legal responsibility for the accident. So, all that the insured is effectively required to do is to claim his insurance. Once the application for claiming compensation for the damages incurred has been made, an FIR needs to be filed with the designated police station, providing all documents the process requires. A case is then registered with the Motor Accidents Claims Tribunal. Insurance Regulatory and Development Authority of India (IRDA) decides on the amount to be compensated. Once the court delivers its verdict, the insurance company will repay that full sum to the victim.

How to claim your Third Party Liability car insurance

       Every insurance company will tell you to reach out to them at the earliest possible hour and inform their representatives about the accident that you’ve been involved in. You can call up the company’s customer care as soon as you are able to and make them aware of the incident and its particulars.
       Once the FIR has been lodged by the third party and their demand for compensation has been documented, the insurance company gets notified of the same. On receiving a court summons, the officials from the insurance company will usually get in touch with you to share the details of the claim settlement.
       At this point, the insurance company will likely ask you to provide them with the claim form along with other documents that they require to process the claim further.
       Most insurance companies now offer their customers the facility to register their claims online. All you have to do is go to the company’s website and enter details like name and policy number to raise a claim.

Things to consider when buying Third Party car insurance

Go through the policy details and make sure you have a clear understanding of what the policy will cover. Your policy should include the following:
       Damage caused to the third party’s property.
       The bodily harm suffered by the third party.
       The accidental death of the third party.
       Permanent disability or death of the driver/owner of the insured car.

Third Party Liability Insurance or Comprehensive Car Insurance?

Comprehensive car insurance, compared to third party liability insurance, provides widely extensive coverage, including accidental cover for the insured, damage caused by human acts like vandalism and theft, as well as natural calamities like floods, storms, and earthquakes. But since third party car insurance is a mandate, a lot of car owners remain oblivious to additional benefits they can claim with the broader coverage of a comprehensive insurance plan. The premium for comprehensive car insurance is considerably higher than that in case of third party insurance and should be one of the significant points of consideration when buying or renewing car insurance. The commercial value of your vehicle should be the deciding factor here. If you drive an aged, low-value vehicle, sticking with third-party liability insurance is a good move. Those with new, high-value expensive cars, on the other hand, will be better placed opting for a comprehensive car insurance plan.

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