Why one needs third-party motor insurance?
Third-party insurance offers coverage that protects against claims of damages or losses incurred by someone who is not the insured.
According to the Motor Vehicles Act, 1988, 'third-party insurance' is a statutory requirement. A third-party motor insurance policy covers fiscal liability incurred by the owner of a car in the event of unforeseen demise or permanent disability of the third party, which was crashed by the vehicle of the policy holder in an accident.
The Insurance Regulatory and Development Authority (IRDA) of India computes the damages.
Third Party Insurance comes handy when your vehicle hits another vehicle, the victim is allowed to register a case claiming for compensation. It covers the insured vehicles in case any liability claim arises out of bodily injury, property damage, or death of a person.
Third-party property damage cover is limited up to 7 lakhs.
Moreover, sticking to third-party liability insurance is a wise idea if you own an old car and don’t want to spend your hard-earned money on it.
According to the Motor Vehicles Act, plying an uninsured vehicle on Indian roads is an offence. Under the third-party car insurance, the insurer compensates any legal liabilities claimed by the other party, in case the insured vehicle is at fault.
This rule is applies for two-wheelers as well. Non-compliance may lead to the enforcement of legal punishment, which includes hefty fines, and trial.
'Disclaimer: This story is for informational purposes only and should not be taken as investment advice.'