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How to make a claim on the Third Party Insurance?

IamCheated.com Research Team | September 06, 2018  2:28:pm

The number of road accidents in India is alarmingly high. The death toll in the year 2017 exceeded 1,50,000. In addition, the number of people sustaining injuries and damage to vehicles is astounding. In spite of this, many vehicles don’t have Motor Insurance and many people are unaware of how to claim for compensation in case their vehicles are damaged as a result of negligence of other people.

Insurance Policies are taken for protection against damages to self, family, property and so on. It is a means of risk management and protection from financial loss. Insurance is used as a hedge against risk or uncertain loss.

What is a Third-party Insurance?

Third-party Insurance differs from a regular Insurance Policy in that it provides protection to the insured from the claims of a third-party. The First Party in this type of insurance is the Insured, while the Second Party is the Insurer. The Third-party is any person who has brought a claim against the Insured. The premium rates for Third-party Insurance have been standardised by the Insurance Regulatory and Development Authority of India (IRDAI) from 1st April 2017.

To better understand this, let’s take an example.

A - (First Party) has taken a Third-party Insurance with B - (Second Party). A loses control of his vehicle and causes an accident hitting C - (Third-party). Both A and C sustain physical injuries and damage to their vehicles. C raises a claim against A for compensation of damages to self and property.

In this case, the compensation will be provided by B for the cost incurred by C as a result of his injuries and damage to vehicle. It is important to note that A receives no compensation for his physical injuries or damage to vehicle.

The most common occurrence of Third-party Insurance is when a person purchases a vehicle. It is mandatory for such a person to take a Third-party Insurance as per the Motor Vehicles Act (1988). Whenever a person purchases a vehicle, the automobile dealer arranges for a comprehensive Insurance cover, to cover for damage claims. This comprehensive cover is over and above the Third-party Insurance mandated by law. The cost of comprehensive cover is higher than a Third-party Insurance as the frequency and volume of damage claims is higher than third-party claims. People generally claim for damage under their own insurance cover as this is less complicated than third-party claims. Claiming from own damage insurance also means that you lose the accumulated No Claim Bonus (NCB) at the time of policy renewal.

What is covered under Third-party Insurance?

  • Property Damage

In the event that you have caused damage to property of another person, you don’t have to worry about the expenses. The insurer will cover for damages. The amount of compensation is Rs 7.5 lakh or the amount of claim, whichever is lower.

  • Death

In case the third-party dies as a result of the accident, then the compensation is determined by the court and covered by the insurer. There is no maximum Cap on the amount of compensation.

  • Disability

If the event leads to a disability, whether temporary or permanent, the insurer compensates for it. If the disability is temporary, then the insurer pays the medical expenses. If it is permanent, then the third party gets a pre-assured sum.

  • Injuries

Any injuries, no matter the severity, are covered under the Third-Party insurance. The resulting medical expenses are covered by the insurer.

Apart from the above, Third-Party also provides legal assistance related to the court tribunals.

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How to claim for damages under Third-party Insurance?

If you are the victim of an accident caused by another person, you can file a claim for personal injuries and damage to vehicle. In case of death, your dependents or beneficiaries can claim against loss of income. Medical expenses incurred on injuries that resulted in death can also be claimed under Third-party Insurance.

The process of staking a claim begins with filing an FIR and obtaining a charge sheet of the same. As the Third-Party Insurance claims are filed at a special court: Motor Accidents Claims Tribunal, you might need to hire a lawyer if you are unfamiliar with the process. Necessary documents like original bills, inspection reports, FIR charge sheet, registration documents and so on must be furnished at the time of filing the claim. The tribunal will hear both parties (claimant and defendant) and examine the evidence.

Another method of claiming Third-Party Insurance is through your own insurance company, in a process called subrogation.  In this case your insurance company will fight on your behalf to recover the claim from the Third-Party liability of the other person’s insurer who has caused the accident.

Premium for Third-party Insurance

If you are purchasing a vehicle and wish to avail Third-Party Insurance, these are the premium rates dependent on the type and engine capacity of your vehicle. The cost of availing a Third-party Insurance according to your type of vehicle is as follows:

Two - wheeler

Vehicle Cubic capacity

Premium rate (Rs)

Upto 75 cc

427

76 cc – 150 cc

720

151 cc – 350 cc

985

Above 350 cc

2323

Private Car:

Engine Capacity

Premium Rate (Rs)

Upto 1000 cc

1850

1000 cc – 1500 cc

2863

Above 1500 cc

7890

 

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