What Are Third Party Insurance Policy – Advantage & Disadvantage

If you are also frustrated by the rising insurance policy prices and now looking for which is the cheapest insurance policy? then that is a third party insurance policy.

What is a Third Party Insurance Policy? What are the Advantages and Disadvantages of a third party insurance policy?

What is Third Party Insurance Policy?

A third party insurance policy also known as “Act Only” it is a type of policy for your vehicle either a car or a motorbike, where the insurance company gives financial coverage against claims made by a third party against any damage or injuries caused during an accident.

Advantages Of Third Party Insurance Policy

If you have purchased a third party insurance policy for your vehicle then you should know about the following advantages that are related to the insurance policy:

Transferring Your Risks To The Company

The first benefit of getting a third party insurance policy is that if any case the insurance policy transfer the risk involving between you and the other vehicle. Suppose your car meets with an accident.

What Are Third Party Insurance Policy - Advantage & Disadvantage

And you are involved in this and the car is yours, there is a damage caused by your car and the other vehicle’s driver and they file a court case against you claiming an amount for their damage compensation. Then in a situation like this, all the risks and liabilities get transferred to the insurance company. Only if you have a third party insurance with all the complete documents.

Usually Low Price

Moving on with the second benefit of buying third party insurance, that is the price of a third party insurances are very low for private vehicles it is cheap and for two wheeler vehicles like a motorbike price of the third party insurance differs from engine to engine.

  • A bike ranging from 75cc to 150cc the Third party insurance rate is only ₹843 as of today.
  • For a cars if the engine cc ranges from 1000cc to 1500cc then you can get a third party insurance-policy for that car for just ₹4030 to ₹4100.

No matter which company motorbike or car you own if they lie within the above listed engine cc they will cost only this much as the rates are decided not by any insurance company but by IRT. Commercial vehicle usually have third party insurance policy rate at a higher side because commercial vehicle carry weight therefore their insurance rates are calculated based on Gross Vehicle Weight (GVW).

What Are Third Party Insurance Policy - Advantage & Disadvantage

For Passenger vehicle like buses their insurance policy rates are calculated based on their Passenger Carrying Weight (PCW). Such vehicles have higher third party insurance price because these vehicles have high chances of getting or giving damage.

No Traffic Challan For Your Vehicle

Moving on with the third benefit of buying third party insurance, according to Indian Motor Vehicle Act 1988, you can drive any motor vehicle on Indian roads. You should have at least a third party insurance-policy to drive the vehicle on the roads without getting challan or fined.

In a price of 1 or 2 challan you can get third party insurance of your vehicle that will also cover your risks of challan.

Super Easy To Buy.

Moving on with the fourth benefit of buying third party insurance, is that if you are looking to buy a third party insurance policy it would only take 5 minutes because of super simple.

Things Don’t Require For Buying Third Party Insurance Policy

  • Vehicle Ownership
  • No Vehicle Inspection
  • No Court Tax or Legal Fees

Things Required For Buying Third Party Insurance Policy

  • Any Identity identification like an Aadhar Card, Driving License, PAN Card, or Passport.
  • Proof of your address
  • A recent passport-size photograph of yours
  • Your Driving License
  • Vehicle registration documents

Since no risk of vehicle damage is covered therefore no vehicle checking or investigation is required, the third party insurance-policy will be issued on behalf of your RC.

Disadvantages of Third Party Insurance Policy

Now these were the advantages now let’s talk about the disadvantages of third party insurance policies too. What are the coverages that are not covered in third party insurance policy.

No Coverage For Accidental Damage

If your vehicle gets damaged in an unfortunate event like an accident you the policy holder expects that the insurance company will give coverage for the damage caused to the vehicle then you are wrong!

Because Third party insurance policy does not cover any accidental damage.

No Coverage For Vehicle Loss

Accidental costs may be still a bit low cost, what if your vehicle gets stolen, gets damaged, or completely destroyed in fire, or what if your vehicle gets involved in an accident creating a huge impact on your vehicle whose repairing cost may be a heavy sum? that will also not get covered in third party insurance-policy.

What Are Third Party Insurance Policy - Advantage & Disadvantage

Third party insurance policy will not give coverage for any cost involving the policy holder’s vehicle.

Read Also: Important Things Before Buying Car Insurance in 2024

Low Vehicle Price With Third Party Insurance Policy

Let’s assume you have purchased a third party insurance-policy for your vehicle which you wanted to sell, then in such case the price of your selling vehicle will get lowered.

Suppose if someone goes to buy a vehicle having a third party insurance policy that does not cover that particular vehicle so in that case the selling price of that vehicle will not include the price of the policy.

Fear Of Vehicle Damage

If you have a vehicle that has a third party insurance-policy then you will always have to drive your vehicle safely because you will always have a fear in your mind that if any damage is caused to the vehicle while driving the repairing amount has to get paid from your pocket.

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