As dictated by the Motor Vehicles Act of 1988, any vehicle that wants to drive on Indian roads must have the minimum coverage of a third party motor insurance policy. It is well-established that the third-party policy, also known as a liability-only policy, covers third-party liabilities in cases of accidents involving the insured vehicle. However, many are not completely aware of the extent of the coverage this policy provides. Let’s explore the same in this article.
Who exactly is the third party?
Firstly, let’s understand who the third party exactly is in this context. The third party refers to anyone who suffers damages and/or injuries as a result of the insured vehicle. The policyholder is the first party and the insurer is the second party.
Coverage in case of injury to the third-party
One never knows when an accident might occur. Even though you may be trying your best to drive in a careful and alert way, certain situations might cause the car to lose control. This may even lead to a collision with another vehicle, hurting the driver of that vehicle. Or, you may end up hurting a pedestrian. In such a situation, you become liable to pay the expenses for the harm caused to the injured party. Here, you can reach out to your motor vehicle insurance provider and raise a claim.
If the claim meets the conditions of the policy, the insurer will pay for the liabilities as mentioned in the insurance contract.
Coverage in case of property damage of the third party
A collision may not only lead to injuries for the third party but may also cause damage to their property. This includes damages to their vehicle or other forms of property that have been directly affected by the collision. For instance, a collision may lead to your car skidding off and hitting the front of a shop. In such scenarios, you are legally liable to pay the shop owner the due compensation for the losses they have suffered. Your third party vehicle insurance can help you in this regard as well.
The amount required by the shop owner to repair the damage will be calculated and paid by the insurer in conjunction with the insurance contract.
Coverage in case of death of the third party
Sometimes, the accident may lead to serious injuries for the third party which may even cause an unfortunate and untimely death. In this grave situation, your motor insurance provider will pay the death benefit to the family of the third party. There is no fixed amount for this scenario. It is determined by the Motor Accident Claims Tribunal.
Coverage in case of legal liabilities
Certain cases of accidents are complex and may require the intervention of a court to settle them. If you have purchased third party insurance for car coverage, then you can rest assured about the expenses involved in this situation as it also covers expenses related to legal liabilities.
The coverage mentioned here is subject to the terms and conditions of the policy. Several exclusions apply as well. For instance, if the accident is caused by you under influence of alcohol or any form of substance abuse, your claim will be rejected. If you are looking for coverage of damage to your own car as well, then you can consider purchasing a comprehensive motor insurance policy.
Prevention is better than cure. Keeping that in mind, always drive safe and be alert when on the road.