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The Third Party Motor Insurance: All You Need To Know

Driving on Indian roads brings a fair share of challenges, even for the most seasoned individuals behind the wheels. Road accidents, traffic violations, and inadequate infrastructural facilities are too common. More than 50 road accidents result in 17 deaths every hour.

Mandatory third-party motor insurance and strict adherence to traffic rules, to a great extent, can ensure hassle-free driving experience. No matter what vehicle we drive, be it a car or a two-wheeler, a motor insurance policy provides a much needed protective cover. In spite of the legal requirement, 60% of vehicles on Indian roads remain uninsured, including 75% of the two-wheelers and 25% of all cars.

With effect from 1st September, post the implementation of Indian Motor Vehicles (Amendment) Act, 2019, driving your vehicle without valid insurance can land you in jail. The basic-level motor insurance is also called a ‘Third-party Motor Insurance.’

  • What is third-party motor insurance, its types and benefits?
  • What has changed as per the new Indian Motor Vehicles (Amendment) Act 2019?

Third-Party Motor Insurance

  • The Motor Vehicles Act, 1988, makes it compulsory for all motor vehicle owners to at least have third party insurance, also called a liability-only policy.
  • Covers liabilities arising out of any damage, injury or death of the third party due to the fault of the insured vehicle.
  • Includes a personal accident cover for the owner/driver only when the personal accident component is part of the policy.
  • It can be upgraded to a comprehensive plan at the time of renewal.
  • Can buy the stand-alone own-damage insurance cover later from a new insurer.
  • Third-party motor insurance could be in the form of ‘Third Party Liability Car Insurance’ or ‘Third Party Liability Two-Wheeler Insurance.’
  • The mandatory third-party insurance could be the cheapest one; however, one should choose the insurance coverage as per their specific requirements.

Benefits:

  • Insured person’s legal liability is covered in case of demise or disability of the third party and any loss or damage to their property.
  • The property damage cover, for car insurance, is limited up to 7.5 lakh. The amount is 1 lakh for two-wheeler insurance.
  • Manages the legal and financial burden of the insured person.
  • It is considered cost-effective in terms of the premium amount.
  • Third-party motor insurance is easy to buy and can be renewed online.

Changes as per The New Indian Motor Vehicles (Amendment) Act 2019

  • The penalties for driving an uninsured motor vehicle have been increased to 2,000 Rs and/or up-to three months of imprisonment for the first offense. 4,000 Rs and/or up-to three months of imprisonment for the second offense.
  • Insurance companies can now deny third party liability claims if the person driving the vehicle does not have a valid driving license/permit or if the insurance premium has not been paid.
  • The Insurance Regulatory and Development Authority of India (IRDAI) is carefully considering linking of motor insurance with your traffic violations. It could mean more motor insurance premiums if you violate traffic rules.

A motor insurance policy protects your vehicle, hard-earned money and ensures peace of mind. With Quickinsure, Get a quick response & buy third party motor insurance policy now!

Sources: Ministry of Road Transport & Highways, GOI, World Health Organization, General Insurance Council, India and The Economic Times.

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