Third-party car insurance is the minimum legal requirement for all vehicles in India under the Motor Vehicles Act, 1988. It covers financial liabilities arising from injuries, death, or property damage caused to a third party (another person or vehicle) due to your car.
✔ What Does It Cover?
- Bodily Injury/Death – Compensation to third-party victims
- Property Damage – Repairs for another vehicle or public property
- Legal Liabilities – Court-mandated payments (if sued)
❌ What’s Not Covered?
- Damage to your own car
- Theft, accidents, or natural disasters (requires Comprehensive Insurance)
- Personal injuries to the driver/owner
Third-Party Car Insurance Premium Rates (2024)
(As per IRDAI guidelines)
| Car Type | Coverage Period | Premium (₹) |
|---|---|---|
| Cars ≤ 1000cc | 1 Year | ₹2,094 |
| Cars ≤ 1000cc | 3 Years | ₹5,271 |
| Cars > 1000cc | 1 Year | ₹3,416 |
| Cars > 1000cc | 3 Years | ₹8,604 |
(Electric cars have a 15% discount on premiums)
Why Buy Third-Party Car Insurance?
✅ Mandatory by Law – Driving without it can lead to fines up to ₹2,000 (first offence) or ₹4,000 + imprisonment (repeat offence).
✅ Affordable – Cheaper than comprehensive insurance.
✅ Unlimited Liability Cover – No cap on third-party injury/death claims.
Disadvantages of Third-Party Insurance
❌ No Own-Damage Cover – You pay for your car’s repairs.
❌ No Theft/Accident Protection – Risk of high out-of-pocket expenses.
❌ Claim Process Can Be Slow – Third-party claims involve legal formalities.
Who Should Buy Third-Party Car Insurance?
✔ Old Cars (10+ years) – Low IDV makes comprehensive insurance costly.
✔ Budget-Conscious Owners – Minimum legal compliance at low cost.
✔ Second Cars Rarely Used – If the car is mostly parked.
How to Buy/Renew Third-Party Car Insurance?
- Online (PolicyBazaar, ACKO, Insurer Websites) – Compare & buy instantly.
- Via Insurance Agents – Get assistance in documentation.
- At RTO Offices – Some RTOs facilitate third-party insurance.
Documents Required:
- RC Book
- Previous Policy (if renewing)
- KYC (Aadhaar/PAN)
Third-Party vs. Comprehensive Insurance
| Factor | Third-Party Insurance | Comprehensive Insurance |
|---|---|---|
| Coverage | Only third-party liabilities | Own damage + third-party |
| Premium Cost | Low (Fixed by IRDAI) | Higher (Depends on car value) |
| Best For | Old cars, legal compliance | New cars, full protection |
Claim Process for Third-Party Insurance
- Inform Insurer – Immediately after the accident.
- File an FIR – If injury/death/property damage exceeds ₹2,000.
- Submit Documents – Claim form, FIR, driving license, RC copy.
- Survey & Approval – Insurer assesses third-party damage.
- Compensation – Paid to the affected party (not the policyholder).
Final Verdict: Is Third-Party Insurance Enough?
- Yes, if you drive an old car or want minimal legal coverage.
- No, if you own a new/expensive car (opt for Comprehensive + Zero Depreciation).
Pro Tip:
If budget allows, upgrade to Comprehensive Insurance for complete protection.