The Supreme Court had directed the Indian Insurance Regulatory and Development Authority (IRDA) to make this rule mandatory for third party insurance for car from September 1. IRDAI has issued circular in this context to direct non-life insurance companies. So far only two-wheelers were available for more than one-year insurance cover in the market.
According to the report of the committee, only 6 million of the registered 18 million vehicles in the country have third party insurance cover.
From 1st September onwards you will be required to take 3 years for a new car and a third party insurance cover of 5 years for the bike.
WHAT IS THIRD PARTY INSURANCE FOR CAR?
Third party insurance for car is also known as Liability Cover. This insurance is related to the third party. If someone has insured the third party insurance of the vehicle and there is an accident, then the insurance company gives the claim to the third party.
Here the first party driver and third-party car are coming in the grip. This insurance also protects the vehicle owner.
The Supreme Court has made Third Party Insurance mandatory for the financial loss of the vehicle coming into the grip of the vehicle.
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WHY IS THE THIRD PARTY INSURANCE FOR CAR NECESSARY?
Vehicle insurance caters to our economic losses on any kind of accident. There is a kind of contract between the insurance insurer and the company. Under this, the agreement is made in the legal form that you will pay the premium and the company will compensate for the loss due to a vehicle accident.
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WHAT ARE THE ADVANTAGES OF THIRD PARTY INSURANCE FOR CAR?
Many people have this misconception that there is no benefit to the insurer in third party insurance. The correct thing is that there is no loss to the insurer because this insurance protects the insured from all financial accidents in all accidents.
These expenses also include hospital and legal expenses. Many times it happens that even if you multiply the damaged property and you are not in a position to pay for it, then the insurance company gives a claim.
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HOW MUCH THE THIRD PARTY INSURANCE FOR CAR WILL COST YOU?
In case you have two-wheelers then the cost will be as follow:
- More than 350 cc power bikes will have up to 14 thousand policies.
- Insurance of 76 to 150 cc will be expensive up to INR 3285.
- 75 cc vehicles will be expensive up to INR 1045.
Third Party insurance on two wheels will be valid for 5 years
In case you have a car then the cost will be as follow:
- A policy of INR 25000 for a car over 1500 cc has to be taken (It is mandatory)
- INR 9500 on the purchase of a car up to 1500 cc car
- INR 5000 on the purchase of a car up to 1000 cc
Third Party insurance for car will be valid for 3 years
The insurance sector regulator, Indian Insurance Development and Regulatory Authority (IRDA) have proposed to increase the premium for insurance of cars, motorcycles, and commercial vehicles from one April to 50 percent. Although there is no proposal to increase the third party insurance for car premium to small cars (up to 1,000 cc engine capacity), which is currently an annualized of INR 2055.
There are two parts of any motor insurance policy. Third Party Liability Cover and On Damage Third party cover is mandatory for all registered vehicles in India. This compensates the vehicle from any damage done to a third party. It does not cover damage to the owner’s vehicle.
So, next time when you buy a new vehicle do not forget to buy a third party insurance policy for your vehicle as it is mandatory in India now.