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Home / Car Insurance / Third-Party Car Insurance – Benefits, Buy/Renew Online
What is Third Party Insurance?
Third party insurance, a statutory mandate under the Motor Vehicle Act, is compulsory for all motor vehicles in India. Often known as 'act-only' insurance, it safeguards against third-party vehicle damage, personal property, and physical injury.
Key Features of Third Party Car Insurance
Here’s a list of the top features of a Third Party Car Insurance Policy.
Low Premium
A third party insurance for cars is available at a low price. It is available at a nominal price as compared to the Comprehensive Car Insurance Policy.
Liability Cover
A third-party liability policy will cover you against personal injuries to a third party and property damages to a third party up to Rs. 7.5 lakhs.
Compulsory Personal Accident Cover - Owner Cum Driver
PA cover is mandatory by law. Hence, it is recommended to buy this cover along with a Third-party Liability Plan. It offers insurance coverage up to Rs. 15 lakhs for the owner/driver in case of death/permanent disability while driving.
Easy Purchase Process
The process of purchasing third party insurance for cars is simple. As it is a standard policy, there is not much to choose from. You simply have to select your car’s model and purchase the policy.
Why Do You Need Third Party Insurance?
You should purchase a Third Party Car Insurance Policy for your vehicle, as it is mandatory as per the rules and regulations of The Motor Vehicles Act 1988. Driving your car without a Third-party Liability Policy is illegal. You can be penalised by the authorities for doing so. A third party insurance policy saves you from legal liabilities and financial losses due to damage to third-party property and injury or death of a third party. Hence, it is crucial to buy a third party car insurance plan.
Third Party Insurance Premium Rates [2024]
Unlike a Comprehensive policy, insurance companies do not decide the third party car insurance price. The 3rd party insurance premium is decided by the Insurance Regulatory and Development Authority of India (IRDAI) based on the Cubic Capacity (cc) of the car’s engine. The premium rates set by IRDAI are subject to changes. Here’s a table showcasing third-party car insurance premium rates for 2024.
THE CAPACITY OF THE VEHICLE’S ENGINE | PREMIUM RATE |
|---|---|
Not exceeding 1,000 cc | Rs. 2,094 |
Exceeding 1,000 cc but not exceeding 1,500 cc | Rs. 3,416 |
Exceeding 1,500 cc | Rs. 7,897 |
Third-Party Insurance Premium Price List for Electric Cars
VEHICLE BATTERY CAPACITY | PREMIUM (1-YEAR POLICY) |
|---|---|
Less than 30 kW | Rs. 1,780 |
More than 30 kW and less than 65 kW | Rs. 2,904 |
More than 65 kW | Rs. 6,712 |
What’s covered?
What’s not covered?
What’s Covered in a Third Party Insurance Policy?
Here’s a list of all that’s covered in a basic 3rd party car insurance policy.
Third-party injuries: There might be an instance where your car accidentally injures a third party. For example, your car might accidentally go out of control for a moment and injure a pedestrian walking on the footpath, the third-party policy will cover the cost of treating such injuries.
Third-party death: In an unfortunate event, you might accidentally injure a person with your car leading to the person’s death. The car third party insurance policy will take care of reimbursing the deceased person’s family members as per the terms and conditions.
Third-party property: Damage to a third person’s property is also covered under a third-party policy. For example, your car might go out of control and crash into someone’s shop along the road. This policy insures you against the expenses arising out of such instances up to Rs. 7.5 lakhs.
Third-party vehicle: This cover is a part of the third-party property point but is mentioned separately as it is a common occurrence. For instance, your car might run into a third party’s bike on the road. The policy will cover damages to the bike as per the terms and conditions.
What’s Not Covered in a Third Party Insurance Policy?
Here’s a list of things that are not covered under the Third-party Policy.
Damage to your car: A Third Party Car Insurance Policy does not offer the ‘Own Damage’ cover. Own Damage Insurance (OD Insurance) cover insures you against damage to your car in case of an accident, fire, man-made calamities, natural calamities and theft.
Personal Accident (PA) cover: Personal Accident cover is mandatory by law. A Third-party policy does not cover you in case of permanent disabilities/death arising from a car accident.
Driving under the influence: A Third-party Liability Policy does not cover third-party liabilities if you are driving the car under the influence of alcohol or other intoxicating substances.
Driving without a valid Driving Licence: The policy does not offer coverage if you drive the car with an expired or invalid Driving Licence.
Outside geographical limit: The policy does not cover third-party damages or injuries/death that occur outside the geographical boundaries as mentioned in the policy wordings.
Unauthorised usage of vehicle: The 3rd party car insurance policy does not cover third-party liabilities caused due to activities such as illegal racing or illegal commercial activities.
An unauthorised person driving the vehicle: The Third-party Insurance Plan will not offer coverage for third-party liabilities when the car is driven by a person other than the owner or the designated driver.
Comprehensive vs Third Party Car Insurance
As the name suggests, a Comprehensive policy offers wider coverage than a third party car insurance policy. The following table provides more details regarding the comparison of third-party and comprehensive car insurance plans.
DESCRIPTION | THIRD-PARTY CAR INSURANCE | COMPREHENSIVE CAR INSURANCE |
|---|---|---|
Physical injury and accidental demise caused to the third party by the insured car. | ✔️ | ✔️ |
Coverage for damages to third party property. | ✔️ | ✔️ |
Own damage coverage | ❌ | Provides coverage in case of damages to your car due to accidents, man-made/natural calamities, theft, fire or total loss. |
Premium | Low | High, as it provides wide-ranging benefits. |
No Claim Bonus | ❌ | ✔️ |
Add-ons | ❌ | ✔️ |
For detailed analysis, visit our detailed guide on comprehensive vs third party car insurance
How to Get Cheapest Third Party Insurance?
Unlike a comprehensive plan, the rates for a third party insurance policy do not change from one insurer to another. The rates are determined by the IRDAI and remain standard for all insurers. The IRDAI might decide to vary it on an annual basis, but all insurers have to abide by the rate stated by the IRDAI. Thus, there is no way to get the cheapest Third party car insurance, as all insurers offer these policies in exchange for the same premium amount.
Whether you own a private vehicle for commuting or a commercial vehicle for business purposes, you need to purchase a Third party insurance policy. The basics of a Third party car insurance policy remain the same for a private and a commercial vehicle. However, there might be slight variations concerning the cover, premium, and terms and conditions. The online purchase process of a commercial policy is also different from the process for a private one.
Factors That Affect Third Party Car Insurance Premium
Third-party insurance rates are decided by the industry regulator (IRDAI) based on the Cubic Capacity (cc) of the car’s engine. Hence, the vehicle’s engine capacity is the only factor that affects the third-party premium rates.
Benefits of Third Party Car Insurance
Here are the key benefits of the Third Party Car Insurance Policy.
Liability Cover
The policy offers a liability cover against injury/death of a third party and damages to third party property. In a way, it is a financial cover for you when it comes to paying third parties.
Legal Compliance
Buying a Third party car insurance policy makes you compliant with the law of the land. An active policy will save you from paying penalties. By buying this plan and renewing it before its expiry, you stay away from being imprisoned for legal violations.
Low Premium
The Third party Car Insurance price is more affordable compared to a Comprehensive plan. The third-party policy is a cost-effective plan that provides basic coverage.
Convenience
A Third Party Car Insurance Policy is a simple plan. It does not have complex features like a Comprehensive policy. If you plan to buy it online, you can do it conveniently through your smartphone within minutes.
How to Buy/Renew Third Party Insurance Online from ACKO
Here are the steps to buy or renew a third party car insurance online from ACKO.
Step 1: Scroll to the top of this page or download the ACKO app on your smartphone.
Step 2: Enter your car’s registration number and hit the “Check Prices” button.
Step 3: Verify your vehicle details and provide details about your previous policy, if available.
Step 4: Enter your mobile number and address pincode and click on “View Plans”.
Step 5: Select the Third-party plan and complete the online payment to buy or renew the third-party car policy.
Note: Existing ACKO customers can log in to your account and renew the policy by clicking on your policy card.
How To Raise a Claim for Third Party Insurance
Claim settlement in a third party insurance policy is a complex process. It is not as simple as it is in a Comprehensive policy. You cannot simply call your insurance company to take care of the matter. There’s a legal process involved. The steps to raise a claim might be different on a claim-to-claim basis. Here’s a broad overview of the steps that are involved in settling a third party insurance claim.
Step 1:
Informing the insurance company (ACKO in this case) and filing the First Information Report (FIR) with the police. Normally, the third party files the FIR.
Step 2:
Registration and hearing of the case in the Motor Accident Claims Tribunal. The Tribunal will go through all the collected evidence and the testimonials.
Step 3:
Result of the case in the Motor Vehicle Tribunal. The hearing and the declaration of the result can take time. It will be followed by the settlement of the claim amount by ACKO.
Disadvantages of a Third Party Car Insurance Plan
Third-party insurance for cars offers financial and legal protection against third-party liabilities. However, it also has its disadvantages when compared to the extensive Comprehensive insurance for cars. Here are the cons of a 3rd party insurance plan.
No Coverage for Damages to Your Car
In case of an accident, the Third-party Car Insurance Plan offers coverage for third-party liabilities; however, it does not cover damages to your car. As a result, you have to bear the expenses towards repairing damages to your car if you have opted only for the Third-party Insurance Plan.
No Coverage for Vehicle Theft
Apart from damages arising from accidents, your car could be stolen. However, under third-party insurance, vehicle theft is not covered. Only comprehensive insurance offers financial protection against vehicle theft.
No Coverage Against Natural/Man-made Calamities
Damages to your car arising from floods, earthquakes, and other natural calamities or damages due to riots, vandalism, and other man-made calamities are not covered under this plan. You have to bear the repair cost during such circumstances.
No Coverage Against Fire/Explosion
In case your car is damaged due to a fire or an explosion, the Third-party Liability Plan (TP) does not cover such liabilities. You have to pay from your pocket for the repairs or losses.
No Option to Enhance the Coverage
Third party insurance does not have the option to enhance your primary plan’s coverage with add-on covers. Add-on covers offer an extra layer of protection by providing coverage for specific damages or losses.
No NCB Benefit
You cannot avail of the No Claim Bonus benefit while renewing the third-party car policy. NCB is a discount offered to you while renewing a Comprehensive policy for not making any claims during a policy period.
Why Choose ACKO for Online Third Party Car Insurance?
Buy Online
Buying Third-party Car Insurance online is hassle-free and easy. At ACKO, you just need to provide a few details of your car on our official website or mobile app and make the payment to insure your vehicle within a few minutes.
24x7 Accessibility
You can access our official website and mobile app 24x7. Whether you are at your home, work, or even travelling, access our online platform any time of the day to buy, renew or raise claims.
No Paperwork
There is no paperwork involved in buying/renewing Third-party Car Insurance online from ACKO. Simply provide a few details of your car and insure it with the Third-party Liability Plan instantly.
Frequently Asked Questions about Third Party Insurance
Third Party Insurance FAQs
Buying and renewal related FAQs
Which third party insurance is best for a car?
There’s only one type of third party insurance available for cars, and the premium rates are identical, no matter which insurance provider you choose. However, opting for an online insurance provider like ACKO is beneficial as it offers you the convenience of online purchase and renewal.
Which is better, third party or comprehensive?
A comprehensive car insurance plan is better than a third-party policy as it provides own damage and third-party coverage.
What is the validity of third party car insurance?
Generally, a third-party policy is valid for one year. However, while insuring a new car, buying a three-year third-party policy is compulsory as per law.
Is it OK to buy third party insurance?
It is absolutely fine to buy third party insurance. Moreover, it is a law-mandated policy that you need to purchase. However, you will not get the own damage cover that is offered by a Comprehensive Policy.
What is the benefit of third party insurance?
The main benefits of third-party insurance are it provides coverage against third-party liabilities and makes you comply with the rules and regulations.
What is the cost of 3rd party insurance for a car?
The third party car insurance price depends on the car’s engine capacity. IRDAI decides the third party car insurance premiums based on the vehicle’s engine capacity.
Why is it mandatory to purchase Third-party car insurance in India?
It is mandatory to purchase Third-party car insurance in India as it is demanded by The Motor Vehicles Act, 1988. Not abiding by this rule can lead to heavy monetary penalties.
I am a good driver with a clean claim record. Is it possible for me to not buy a Third-party policy and drive my car?
All car owners must purchase a Third-party policy irrespective of their driving skills or claim records.
What happens if I am caught driving my car without a valid Third-party car insurance policy?
Driving without a Third-party car insurance policy is a legal offence. Therefore, you will be penalised for it. The penalty includes a monetary fine and can even lead to imprisonment. Also, you cannot raise any claim in case of third party injuries or damages if you don’t have a valid Third party insurance policy.
Is there a better policy than a Third-party Liability policy?
A Comprehensive policy can be a better option than a Third-party Liability policy as it offers wider coverage. It also covers damages to your car in case of an accident, fire, man-made calamities, natural calamities and even theft.
Is it possible to purchase a Roadside Assistance add-on with a Third-party car insurance policy?
No, you cannot purchase a Roadside Assistance add-on with a Third-party car insurance policy. You cannot purchase any add-ons with a Third-party policy. You can purchase add-ons only with a Comprehensive policy.
Does the model of my car matter while buying a Third-party policy?
The premium for a Third-party Car Insurance Policy based on the vehicle engine’s cubic capacity is regulated by IRDAI. As different car model engines might have different cubic capacities, the premium for them might be different.
From where can I purchase a Third-party Liability car insurance policy?
You can buy Third-party car insurance from multiple places such as the showroom (from where you purchased your car), from a certified agent, from the insurance company’s branch office or online. However, buying Third-party car insurance online is a quick and hassle-free process.
Does a Third-party car insurance policy offer sufficient coverage?
A third-party cover only looks after third-party liabilities. If you are looking for a policy that will offer you sufficient coverage for your car as well, you should consider a Comprehensive policy.
What are the eligibility criteria for purchasing a Third-party car insurance policy?
You need to own a registered car to buy a Third-party car insurance policy.
On what basis should I compare Third-party car insurance policy providers as the premium for it is the same across insurers?
You can compare insurers offering Third-party policies based on their service quotient.
Where can I find the detailed Policy Wordings of the Third-party Liability car insurance policy?
You can find the detailed Policy Wordings of the Third-party Liability car insurance policy on the insurance company’s website. Usually, it should be placed under the Downloads section. You can download the Policy Wordings for a Liability-only car insurance policy for a private vehicle for three years offered by ACKO over here.
Is it possible to renew a Third-party car insurance policy online if I had purchased it offline?
Yes, it is possible to do so. You will have to visit www.acko.com for details. However, you can also choose to renew Third-party car insurance online from a different insurer.
Documentation related FAQs
Do I have to do some paperwork to buy Third-party car insurance online?
Usually, there is no need for any paperwork while buying Third-party car insurance from Insurtech companies such as ACKO.
How do I physically carry my online Third party car insurance policy?
You can take a printout of your online Third-party car insurance policy and carry it in the physical format. You can also download in it a PDF format or store it in DigiLocker for easy access.
What if there is a mistake in my Third-party car insurance policy document?
If there are any typographical errors or minor errors such as a change in address or contact number, you can get those done quickly via an endorsement process by contacting your insurance company. Major changes such as modifications in the engine can also be done via an endorsement but it can affect the premium.
What happens to my Third party insurance policy if I sell my car?
If you are selling your car, you have two options for your Third party insurance policy. You can either cancel it or transfer it to the new owner. In both cases, you will have to submit the required documents.
Claim related FAQs
Is there a need to file a First Information Report in case of a third-party claim?
Yes, there is a need to file a First Information Report in case of a third-party claim.
Who handles the cases filed for third-party claims?
Third-party claims are handled by a dedicated court known as the Motor Accident Claims Tribunal.
Is there a limit when it comes to the compensation offered by the insurance company under the third-party property damage clause?
Yes, there is a limit of Rs. 7.5 lakhs concerning the compensation offered by the insurance company under the third-party property damage clause.
Is there a limit when it comes to the compensation offered by the insurance company under the third-party injury/death clause?
There is no limit when it comes to the compensation offered by the insurance company under the third-party injury/death clause.
Is there a time limit before which one has to file a claim?
Ideally, a third-party claim needs to be filed within 60 days of the accident. However, it is recommended to do it at the earliest.
Someone else was driving my car at the time of the third-party accident? Will my insurance company settle the claim?
The Third-party policy is for the vehicle. Therefore, the insurance company can settle the claim provided the person driving the car was driving it legally with a valid driving license.
Will my Third-party policy cover me if I purchase it from one city but the car accident takes place in another city?
Yes, a Third-party car insurance policy offers nationwide coverage. You can purchase the policy from anywhere in India and it shall cover you throughout the country.
Third Party Car Insurance Latest News
Third-party car insurance premium rates expected to be hiked
- May 26, 2022
The Third-party Motor Insurance premium rates are expected to be hiked next month. The changes to the premium rates shall be across all categories of vehicles. These rates are usually revised every year; however, they were not revised in the last two years due to the COVID-19 pandemic. The Insurance Regulatory and Development Authority of India (IRDAI) usually notifies the Third-party Insurance rates for cars; however, this year, the Ministry of Road Transport and Highways shall notify the rates in consultation with the IRDAI. There is a proposal 7.5% discount on the premium rate on hybrid electric vehicles. As per The Motor Vehicles Act, 1988, Third-party Motor Insurance is mandatory for all vehicles in India, while the Own Damage cover is optional.
Long-term Third-Party Liability vehicle insurance withdrawn
– June 10, 2020
The long-term Third-Party Package, which includes Own Damage cover as well for three and five years, has been withdrawn by the IRDAI. This applies for both two and four-wheelers with effect from 1 August 2020. The IRDAI observed that the delivery of long-term Third-Party Liability policies is difficult as it is expensive for both two-wheeler and four-wheeler owners. It added that the possibility of being linked to loans or forced selling was high and that the vehicle owners have no choice but to opt for the long-term product with no options. Additionally, the IRDAI said that the NCB is not the same across insurance companies, which could lead to dissatisfaction and confusion among policyholders. With this notification, customers won’t be given the option of long-term Own Damage plans, only long-term Third-party plans will be offered to customers.
COVID-19: Third-Party vehicle insurance premium to remain unchanged in next fiscal
– April 2, 2020
The Insurance Regulatory and Development Authority of India (IRDAI), in an order dated 27 March 2020 has directed that the premium for Third-party vehicle insurance will not be revised for FY 21. In the wake of the rising Coronavirus infections in the country, the government has announced a 21-day lockdown. The order issued by the insurance regulatory states that the premium for the Third-party motor insurance which was set for the year 2019-20 will continue beyond 31 March 2020 till there is further notice. Insurance companies will continue to charge the same third-party vehicle insurance premium from 1 April 2020 to provide some relief to policyholders in the country.
Third-party vehicle insurance premium increase put on hold for now
– March 30, 2020
The Insurance Regulatory and Authority of India (IRDAI) has announced that the current third-party insurance premium prices for the year 2019-20 will continue beyond 31 March 2020. The announcement comes amid the ongoing lockdown due to the deadly novel Coronavirus infections. In an order released by the IRDAI, the validity of third-party insurance premium will be increased and remain unchanged beyond the due date of 31 March 2020 until further notice. This effectively means that insurers cannot increase or will continue to offer third-party vehicle insurance at the current rate set by the IRDAI until the regulator revises the premium.
Third-party motor insurance premiums expected to increase by up to 15%
– March 11, 2020
The third-party vehicle insurance for the next financial year 2020-21 is expected to rise by 15%. The revised structure will be effective from 1 April 2020. The increase in premium for the insurance will be across all automobile segments. A proposal of a 2% hike is expected on commercial vehicles, while electric vehicles will witness a hike as well. Long-term third-party vehicle insurance for both two-wheelers and four-wheelers is mandatory as per the directive by the Supreme court. While the long-term insurance policy is 3-years for four-wheelers, it is 5-years for two-wheelers.
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