Third party motor insurance policy 101

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.




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