Third Party Liability Only Car Insurance Policy Explained

On the basis of coverage, there are three types of car insurance plans in India. These are Third Party (for your information also known as Liability Only), Comprehensive Car Insurance, and lastly Standalone Own Damage Car Insurance.

Here are some things you should know about Third Party Liability Only Car insurance.

1. As per the 2002 Indian Motor Tariff, it is punishable by law to drive a car on Indian roads without the minimum coverage of Third Party Liability Insurance at the least.
2. It is the most basic type of car insurance plan and provides coverage only in the case of damage incurred by a third party involved in an accident by the insured’s car.
3. It includes the following damage that would be covered by it in case of harm caused to a third party: bodily injury or death, permanent or temporary disability, property damages of up to Rs 7.5 Lakh.
4. It does not cover own damages incurred by the insured’s car. The only damages it covers are those incurred by a third party. If an accident occurs which does not involve any third party, the financial damages occurring from such a case would not be covered by it. Further, even in an accident involving a third party, only the third party’s damages would be covered, and not the insured’s. As such, it is not an advisable policy coverage.
5. Car Insurance Add-On Covers are not available with Third Party (Liability Only) car insurance. Add-ons refer to features that can be additionally purchased at an extra premium to provide coverage in situations of varied damages incurred by the insured. However, these are available only in the case of Comprehensive Car Insurance and Standalone Own Damage Car insurance.
6. In addition to being exposed to damages in case of damage to the insured’s car in an accident, there is also no coverage of damages in case of theft of the insured’s car. It is thus further inadvisable to purchase this type of insurance policy as it leaves you open to damages of theft in case of such an unfortunate event.
7. There is also no coverage in case of natural calamities. In Comprehensive Car Insurance, certain add-ons such as Engine Protection Coverage may be purchased. This would provide protection for damages incurred by harm to an engine in case of an event such as a natural calamity. As mentioned, add-ons are not available in Third Party Liability Only car insurance. Thus, you would also be exposed to damages of natural disasters.
8. In India, it is mandatory for new cars to be insured with a long-term Third Party insurance policy which has a validity of at least 3 years.

Takeaway

The main takeaway and the bottom line is that while it is legal to drive on the Indian roads with a minimum of Third Party Liability Only Car insurance, there are various drawbacks to it. Thus, Comprehensive Car insurance is the recommended policy to go for, as it offers coverage to your own car in case of damage in an accident, as well as to you in case of medical expenses, and further, it allows you to tailor the policy with add-ons, which are not available to you in Third Party Liability Only Car insurance.

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.