What is third party insurance? When it comes to a motor insurance policy for your car or bike, there are two kinds of plans you can choose from – a comprehensive policy or a third party policy. While the term comprehensive insurance describes a plan that offers complete protection, the term third party insurance is not very indicative as to the kind of cover provided.
This is probably one of the reasons why ‘what is term insurance’ is a popular search term on the internet. There are probably hundreds of thousands of potential buyers who not particularly sure what this kinds of insurance entails and so they flock to the World Wide Web for answers. If you are one such buyer then the internet has lead you to the perfect article. This is because the next 500 words will tell what third party insurance is and also explain its benefits and who should buy such a plan. So what is third party insurance? In a nutshell, it is the most basic, vanilla sort of insurance you can purchase for your two or four wheeler vehicle. It is the minimum amount of insurance you need to ride/drive your car in India. It covers your liability to pay for damages and injuries occurring to others in accident in which you are either at fault or involved in. Say you are driving to work one day and suddenly you meet with an accident. You might be liable to pay for damages and injuries that other motorists and pedestrians suffer due to the accident. However, with third party insurance, your insurance company will provide the needed compensation on your behalf. However, third party insurance will not cover any damages that occur to your vehicle. The only cover it will provide you is personal accident cover. This component of protection will provide up to 15 lakhs in compensation if you are grievously injured or lose your life in an accident. What are the benefits of third party insurance?
Now what we have answered ‘what is third party insurance’ let’s move on to its benefits. The singular benefit of third party insurance is affordability. Since it is the most basic form of cover, it is also the most cost-effective. The premiums of such plans are decided purely on the cubic capacity of your vehicle. The starting price of third part two-wheeler insurance is around Rs. 500 whereas the premium for cars starts from around Rs. 2,000. Who is third party insurance suitable for? Well, anyone looking for affordability should go for third party plans. You can also purchase longterm third party insurance which will be made available to you at even more affordable rates. However, if you are looking for complete protection, you need to go in for a comprehensive plan. Because what is third party insurance going to offer you beside personal accident cover, nothing! We hope this article has been helpful and has answered the question ‘what is third party insurance’. Remember to ride/drive safe. Good luck and all the best.