Third Party Insurance is also known as T.P. Policy or Liability Only Policy. It is the basic insurance policy as well as the cheapest insurance option available.
This policy does not evaluates the vehicle or any other accessories installed, so no claim whatsoever is entertained for damage to the same under any circumstances. The premium charged is only for covering the following risks :
- Third Party Liability.
- Personal Accident.
- Alternate Fuel.
Third Party Liability :
All damages done to any another person/property by the insured vehicle are Third Party damages & are payable under this policy. Premium varies depending on Vehicle Category based on their :
- No. of Wheels – 2 Wheeler, 3 Wheeler, 4 Wheeler etc.
- Cubic Capacity – Below 1000 CC, 1000 – 1500 CC, Above 1500 CC etc. (Cars).
- Nature of Use – Private, Public, Goods Carrying, Passenger Carrying, Miscellaneous etc.
- & more.
These premiums are decided by I.R.D.A. (Insurance Regulatory & Development Authority) & renewed time to time on yearly basis.
Compensation can be claimed in case of Third Party damage, injury or death once the F.I.R. has been filed.
Personal Accident Insurance :
Accidents can happen anywhere, anytime & to anyone, especially while commuting. Driver, Cleaner & Passengers do travel in the vehicle & in case of any unfortunate event they may lose their life. It can be, that the person commuting in the vehicle is the only bread winner in his/her family & they may have to suffer severe financial losses in addition to the emotional loss (which is non measurable in terms of monetary compensation).
In order to provide some financial stability & security to the family of the deceased, insurers offer Personal Accidental Cover along with the Motor Policy. Depending on the choice of Vehicle Owner, he may pay additional premium to cover :
Compensation can be claimed only in case of death & no claim is entertained in case of injury.
Alternate Fuel Insurance :
Vehicles are manufactured to run on conventional fuels like Petrol & Diesel but nowadays C.N.G. & L.P.G. are also used to run automobiles as their running cost is low. Additional premium is therefore charged for these fuel types.
Hence we can conclude that Third Party policy simply covers the liability payable to the Victim (other person involved) in unfortunate event of an accident & no claim of any sort is payable to the Vehicle Owner for damage to his own vehicle however the other victims (driver/cleaner/passenger) can be insured & they will get compensated in case of death.