When you buy third-party car insurance, it’s easy to assume you’re fully protected. However, many vehicle owners don’t realise that this type of cover only protects others, not their vehicle. This often leads to confusion at the time of claims, especially after an accident.
If you’ve ever wondered exactly what third-party car insurance pays for and what it doesn’t, this guide is for you. We’ll walk you through the key coverages so you’re not caught off guard when it matters most. Knowing the limits of your car insurance today can help you make smarter choices tomorrow.
What Is Covered Under Third-Party Car Insurance?
Third-party car insurance protects you from legal and financial liabilities if your car causes harm to someone else or their property. Here’s what it usually covers:
1. Injury or Death of a Third Party
If your car is involved in an unfortunate accident that causes injury or loss of life to someone, such as a pedestrian or another driver, your third-party insurance will help by covering the compensation you are legally required to pay. The exact amount is usually determined by a court or the Motor Accident Claims Tribunal (MACT). While the policy does not directly cover medical expenses, it does cover the legally awarded compensation related to the injury or loss.
2. Damage to Someone Else’s Property
If your vehicle damages someone else’s property, like another car, a gate, or a shop front, your policy covers the cost of compensation, within the limits set by the insurer. It’s important to know that this doesn’t include damage to your vehicle or property.
3. Legal Liabilities
In the event of a legal dispute arising from an accident, third-party insurance also covers legal expenses, such as lawyer fees or court-awarded compensation, but only within the coverage limits specified in the policy.
4. Personal Accident Cover for Owner-Driver
By law, every third-party policy includes a personal accident cover of up to ₹15 lakh for the owner-driver. This covers accidental death or permanent disability while driving the insured car. However, this benefit applies only to the registered owner-driver, not to passengers or other drivers unless you purchase extra cover.
What Is Not Covered?
While third-party insurance covers key legal and financial liabilities, it also has certain limitations. Here’s what is typically not included under this type of policy:
1. Damage to Your Vehicle
If your car is damaged in an accident, third-party insurance typically does not cover the repair costs. This policy only covers damage caused to others, not to your vehicle. To protect your car, you’ll need a comprehensive insurance policy that includes own-damage cover.
2. Damage from Natural Calamities or Theft
Events such as floods, earthquakes, fires, or theft are not covered under third-party insurance. This plan is limited to covering third-party liabilities and does not protect against loss or damage to your vehicle resulting from natural events or criminal acts.
3. Injuries to the Policyholder or Passengers
Third-party insurance includes personal accident cover for the owner-driver, as mandated by IRDAI. However, it does not cover medical costs for the driver beyond this cover, or for any passengers. Additional personal accident coverage must be purchased separately if you wish to cover other occupants in the vehicle.
4. Accidents Involving Illegal Use or Drunk Driving
If the vehicle is involved in an accident while being driven under the influence of alcohol or drugs, or used for illegal purposes, the insurer has the right to reject the claim. Responsible usage of the vehicle is essential for maintaining policy validity..
Understanding Coverage Limits
Third-party car insurance offers valuable protection if you accidentally cause damage or injury to someone else, but it does have limits.
For injury or death of a third party, there’s no upper limit on the compensation. The amount is usually decided by a court or the Motor Accident Claims Tribunal (MACT), and your insurer is legally required to cover it in full.
However, when it comes to damage to someone else’s property, such as another vehicle, a wall, or a shop, the coverage is limited to ₹7.5 lakh. If the actual damage costs more than that, you’ll need to cover the extra amount yourself.
It’s essential to be aware of these limits before you find yourself in a difficult situation. A quick look through your policy documents can help you understand exactly what your insurance does—and doesn’t—cover.
Why Is Third-Party Insurance Important?
Even the most careful drivers can face unexpected situations on the road. A sudden accident or minor mistake could lead to damage or injury to someone else, and that’s where third-party insurance steps in. It’s not just a legal must-have under the Motor Vehicles Act—it’s a simple way to protect yourself from high costs and legal hassles.
Platforms like TATA AIG make the process smooth from start to finish. You can buy or renew your policy online in just a few minutes; no lengthy forms or branch visits are required. Additionally, if you ever need assistance after an accident, TATA AIG provides access to over 5,900 cashless garages for cars and more than 4,500 for two-wheelers across India. That means trusted repair support is always nearby, whether you drive a car or ride a bike.
Reliable support, quick service, and the confidence of being legally covered—third-party insurance with TATA AIG makes driving feel a lot more secure.
Who Should Choose Third-Party Car Insurance?
If you drive occasionally, own an older or second-hand car, or just want to meet the legal requirement without spending too much, third-party insurance is a practical choice. It keeps you covered for the basics without stretching your budget.
Platforms like TATA AIG make it super easy to get started. You can get a quote in just few clicks and buy your policy online in minutes, no paperwork, no waiting around. Additionally, there are significant savings to be had. TATA AIG offers up toan 85% discount on new car insurance and 75% off if you’re renewing for an older vehicle.
If you’re looking for simple, no-fuss protection that does the job, third-party insurance from TATA AIG is a solid pick.
Final Thoughts
Third-party car insurance is a necessity for every car owner. It provides coverage for the monetary loss and legal implications that may arise if your vehicle causes harm to other individuals. Although it neither covers your car nor provides extensive coverage like a comprehensive plan, it ensures you are a law-abiding citizen on Indian roads.
Knowing the damages and the limits of third-party insurance enables you to make a wise and informed decision. If your vehicle is old or has low mileage, this policy provides you with peace of mind and legal protection at a reasonable price. Renew your policy in time to avoid a fine and for continued protection.
Gangtokian Web Team