Third-Party Motor Insurance: What Does It Cover?

As a vehicle owner, you must be aware of the requirement of registration, insurance, and PUC for your vehicle. While registration is one-time compliance, PUC is a fairly simple process. Hence, there is compliance with these regulatory requirements. Insurance, on the other hand, is often regarded as a complex process which is why vehicle owners tend to skip buying one.

Since insurance is a regulatory requirement, driving your vehicle without one attracts hefty penalties. The Motor Vehicles Act of 1988 lays down this requirement, and thus, all vehicle owners need to have insurance coverage alongside their registration and PUC.

What is third-party motor insurance?

A third-party policy, among the different types of plans, is the minimum required insurance coverage. This insurance policy safeguards the policyholder from legal liabilities that may arise in the unfortunate event of an accident or collision. Hence, a third-party policy is also known as a liability-only cover.

For instance, you are caught in a collision with someone’s car injuring another person as well as damaging their vehicle. In this situation, a third-party policy provides legal coverage from liabilities that may arise. *

Is third-party policy mandatory?

As discussed above, a motor insurance policy is mandatory. But among the different insurance plans, a third-party policy is the minimum insurance coverage that all vehicle owners must have. Having only a standalone own-damage cover is not sufficient compliance with the law, and thus, you need to have a third-party policy, irrespectively. *

What is covered by a third-party motor insurance policy?

You can buy third-party motor insurance online, or offline. Despite the platform, you get the same insurance coverage. In a motor insurance policy, the insured individual is known as the first party, whereas the insurance company is known as the second party. The insurance contract is between the first party and the second party. Thus, a third party is any person outside the contract of insurance. Here’s what is covered by a third-party motor policy –

  • Property damage

In the unfortunate event that you damage the property of a third person in an accident, your policy’s third-party coverage kicks in to safeguard you from liabilities. This ensures you need not pay from your pocket for the liabilities that may arise. A third-party plan covers damages up to ₹7.5 lakhs. *

  • Injuries, disability, and death

Alongside property damage, a third-party policy also covers the injuries that such a third person may face. These injuries include bodily injuries as well as extreme situations of disability. In the unfortunate event of the death of a third person, the insurance company pays compensation to the dependents of such a third person. The amount of compensation is determined by the tribunal. *

Considering a third-party coverage is the minimum insurance cover, its premiums are governed by the insurance regulatory body, the Insurance Regulatory and Development Authority of India (IRDAI). If you choose to purchase a third-party policy online, you can also use the vehicle insurance online payment facility. You can visit the official website of IRDAI for further details.

Lastly, a personal accident cover is also mandatory with a third-party policy. To know how much it impacts your overall premium, you can make use of a nifty tool, the motor insurance calculator. This is a free tool provided by leading insurance companies to compare the available plans and know the premium cost. *

* Standard T&C Apply

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.


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