In India, online motor insurance is compulsory and majority of auto owners generally stick to the least coverage. It is affordable and gives equivalent security. According to insurance terminologies, customer purchasing auto insurance is the first party and the person who gets indirectly connected is the third party. Third-party vehicle insurance offers security when you are guilty for an accident. It provides below mentioned liabilities:
This insurance type covers the costs incurred by policyholders in the form of compensation for damages caused by an accident to a third-party’s property. In this scenario, financial support is given to the third party on policyholder’s behalf.
It insures any bodily injury caused to the third party in case accident where insured is at fault. Third party vehicle insurance is designed to give you a legal and financial security in case injury or death of the third party.
Usually, this policy provides cashless claim settlement facility. However, there are specific scenarios where the insurer is exempted from giving advantages which are mentioned below:-
• Any damage to covered vehicle and/or any injury to policyholder is not insured under this plan.
• If the vehicle is purchased for hire or is rented.
• In case the driving person does not have valid license to drive.
• In case the car is used for commercial purpose and the auto owner does not have a permit for the same.
•Motor insurance may get lapse due to non-payment of premium or on expiry date.
Features of Third-Party Insurance
• According to Indian Motor Vehicle Act 1988, this insurance is compulsory for auto owners.
•It is affordable.
• The person who buys this coverage is first party and the beneficiary is known as the third party.
• It covers only third-party losses as well as damages.
• The plan gives protection for the mistake of the third party.