A third Party Insurance policy is the most basic motor insurance plan there is in India. Sometimes referred to as Act Only coverage, this is a legal requirement that is found under the Motor Vehicles Act. This type of insurance aims to compensate the third party in case of an accident. The term third party represents a person, vehicle and property other than the insurance company and the insured.
Why do you need third party insurance?
Apart from a legal mandate, third party insurance is necessary and beneficial in case of an emergency.
- Third party insurance is mandatory by law for all vehicle and motorcycle owners.
- A third party insurance policy is ideal for owners of old vehicles and vehicles of low value as it is easily affordable.
- Third party insurance policy provides financial assistance and caters to damages incurred by the third party.
- Although a third-party insurance plan does not compensate the insured, it does cater to all legal liabilities incurred
What are the benefits of a third-party insurance plan?
The benefits of a third party insurance policy are:
- Acquiring an online third-party insurance policy for your vehicle is easy, time saving and seamless.
- In case of an accident, a third party insurance plan caters for the legal obligations and offers financial assistance to the third party.
- If you compare third party insurance to comprehensive insurance policies, one realizes the cost differences and affordability of the latter.
- The best third-party insurance policy is ideal for old and low-value vehicles as they help you save on insurance premiums.
Difference between third-party insurance and comprehensive insurance policy
A comprehensive insurance policy builds on a third party insurance policy by having additional add-on benefits aimed at benefiting the insured. The main differences between the two insurance policies are listed below.
- Third party insurance plan offers basic coverage and is therefore cheap whereas a comprehensive insurance plan offers additional custom add-ons that result in the premiums being expensive.
- A comprehensive insurance policy covers damages caused by man-made and natural causes. A third party insurance policy covers property suffered by the third party.
- Online third-party insurance plans are easy and fast to acquire as compared to a comprehensive insurance plan
- A third party insurance quote indicates that premium rates are relatively similar across motor insurance providers. A comprehensive insurance cover differs among motor insurance providers due to the nature of add-ons available.
- A comprehensive insurance cover is ideal for expensive and luxury vehicles while a third party motor insurance plan is ideal for low value and old vehicles.
- A third party insurance plan takes care of the legal liabilities, body injury and accidental death resulting from an accident caused by the insured. A comprehensive cover compensates the insured as well as the third party.
Coverage provided by a third party insurance plan for private and commercial vehicles
- Third party insurance policy provides compensation to the damage of property belonging to the third party
- Provides coverage to bodily harm or accidental death to the third party
- Permanent disability and death of the policyholder is covered by a third party insurance policy
- An online third-party insurance policy covers your legal liabilities for the damages incurred by the third party.