Are two major types of car insurance policies. Of them, the third-party policy is the basic one that every vehicle needs to purchase. It is a compulsory insurance cover and is essential to keep one away from legal complexities arising due to third-party losses or damages.
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Keep reading to know more about third-party car insurance!
What Is Third-Party Insurance?
According to the Motor Vehicles Act, 1988, it is mandatory to have third-party insurance while purchasing a new vehicle. It covers the expenses that are incurred due to damages and losses caused by the insurance holder’s car to a third party’s property or life.
However, third-party insurances do not cover expenses arising due to damages to the owner’s vehicle. These policies are affordable compared to comprehensive ones.
Who Should Buy Third-Party Insurance?
While purchasing a new four-wheeler, the owner often chooses comprehensive insurance. This insurance covers the owner’s vehicular damages and the damages of third-party property and persons. Therefore, the owner procures comprehensive insurance to cover both safety and liability at a time.
Also Read – See what you Need To Do After A Car Accident.
It happens when the car’s IDV or Insured Declared Value is clearly defined. It seems beneficial to opt for comprehensive insurance considering the various add-ons and other benefits it provides. However, once the car ages, the owner may find it an extra burden to pay a huge premium for a comprehensive policy.
Minor damages to the car are repairable at lower costs as compared to the high monthly premium. One might consider not opting for policy renewal. But, it is illegal and risky to drive a car without an insurance policy.
At this point, third-party insurance plays a saviour. It is legally essential and is also cheaper compared to comprehensive ones.
As third-party insurances do not come with add-ons, they are much more reasonably priced than comprehensive ones. Moreover, they cover the cost of damages made by the owner’s vehicle to other’s property or lives. Therefore, the owner is safe from legal issues and complexities or expenses arising out of it.
Benefits Of Opting For Third-Party Insurance
Here are some of the reasons why one should procure third party insurance for car
- Cost-efficient plan
Third party car insurances provide reasonable coverage and lower premiums. So, third-party insurances are quite easy for the pocket. Moreover, while calculating the policy compensation amount, the owner’s annual income is considered.
- Provides legal cover and financial assistance
When a car owner causes damage to a third party, it might lead to legal issues.
Legal liabilities often drain a huge amount of financial resources leaving the car owner bankrupt. Third-party car insurance provides much-needed financial coverage during such situations.
Most importantly, as mentioned, third-party insurance is a legal requirement as per laws. So, having this policy makes one legally compliant with the law, thus helping to avoid fines and other fees.
Easy, Simple And Quick Procedure
One can easily buy third-party insurance online right from the comfort of their home any time, anywhere. One simply needs to choose the suitable policy, provide the necessary documents, make the payments and buy the policy. Apart from that, one can easily renew the policy from the insurance company’s website.
Opting for a car insurance plan that provides well-rounded coverage is therefore of the utmost importance. Such a plan covers in case of accidental damages besides offering protection against financial liabilities. Though comprehensive insurance may seem attractive considering its extensive coverage, they come with higher premiums. Though both insurances are important, the choice depends on car owners.
However, third-party insurances are recommended as they are mandated by the government and offer basic coverage at a lower cost.