Third Party Insurance Rules: If you drive a car or bike, it is important to understand third-party insurance. Third-party insurance, or simply act-only insurance, is a legal requirement to drive any vehicle on the road in India.
Many people buy insurance, but they do not know the meaning of first-party, second-party and third-party insurance. It is very important to understand these terms as it helps you understand who will be covered in case of an accident.
What do first, second and third parties mean?
When it comes to insurance, there are three parties.
- First Party: The person who buys the insurance policy, i.e. the owner of the vehicle.
- Second Party: The company that issues the insurance policy, i.e. insurance company.
- Third Party: The person or property that is harmed in an accident caused by your vehicle.
That is, if your vehicle injures another person or damages their property, third-party insurance compensates them.
Why is this insurance legally necessary?
Under the Motor Vehicle Act in India, every vehicle owner is required to have third-party insurance. Driving without this insurance can result in heavy fines. In many cases, the vehicle may even be impounded.
Key benefits of third-party insurance
1. Financial Security
If your vehicle injures another person or damages their property, the insurance company will compensate them. This saves a lot of out-of-pocket expenses.
2. Protection at low premium
Third-party insurance premiums are generally quite affordable. It provides both legal protection and financial security at a low cost.
3. Help in accident
The insurance company compensates third-party people in case of an accident, which reduces the financial pressure on the vehicle owner.
Insurance money is not received in these cases
Many people think that having a policy will provide coverage in every situation, but this is not true. Experts say that the insurance company may refuse to pay the claim in certain circumstances, such as:
- if the driver is driving under the influence
- if a minor is driving
- If the driver does not have a valid driving license
- In these cases, the insurance company may refuse to pay the claim in case of an accident.
Also read: New variant in Hyundai Venue, now premium features will be available at lower price
An important thing that people often don’t know:
If you are purchasing third-party insurance, it is important to know that this policy does not cover your own vehicle. Its main objective is to save the third party involved in the accident or their property. If you want to cover damage caused to your vehicle as well, you will have to buy comprehensive insurance.
Comments are closed.