The risk of getting involved in a road accident while driving is a genuine concern. It may cause physical injury or even lead to fatality in some situations. Then, there is the risk of a third party’s injury or their property being damaged.

All of these liabilities are conveniently covered if you have a third-party car insurance policy. 

Read on to learn more about this insurance policy and its importance for a car owner.

Third-Party Car Insurance – Meaning and Purpose 

Also called “act-only cover”, this car insurance policy is a liability insurance type that safeguards car owners from claims that a third party makes. 

This insurance policy acts as a safety cover by providing compensation for injuries or losses of third parties that are caused due to an accident in which your vehicle is involved. 

It also safeguards you from legal liabilities, if in case the damage to the third party extends to serious physical harm or even fatality. 

Is Third-Party Insurance Mandatory? 

Yes, in India, this insurance policy is mandatory by law, in accordance with The Motor Vehicles Act, 1988. Whether you opt for separate car insurance with more coverage or not, this insurance policy is mandatory to own. 

Why Third party-Insurance is Mandatory 

Now that you know the answer to is third-party insurance mandatory in India, let us understand why it is mandated by law. 

Road accidents are common on busy streets or highways, especially with narrow lanes characterising many cities and towns in India. In case a car accident results in injury to a third party (or person), it could be expensive to provide ensuing medical treatment to that individual. 

Since the car owner has already purchased a third-party car insurance policy, then the insurer will pay for the third party’s treatment. This way, the car owner will be absolved of financial obligations related to the payment for the medical treatment. 

Moreover, since it is legally mandatory to own this car insurance policy, driving without it or with an expired policy could result in penalty and temporary or permanent driving licence cancellation. 

Third Party Car Insurance – Importance 

• Relief from Mental Stress – Owning this insurance policy will keep you stress-free in case of unfortunate events that can be financially burdensome. Rather than having to worry about the expense, you will be provided with immediate assistance to deal with the incident.
• Financial and Legal Protection – Whether the third party involved is disabled or dead, this insurance coverage will shield you financially by compensating on your behalf. The same applies to the damage to the third-party vehicle or property. Additionally, the legal liabilities will be taken care of if the third party makes any claim.
•  Readily Available  – Due to the fact that it is legally mandatory, this insurance policy is readily accessible and can be purchased or renewed online.

Conclusion 

The crucial role that third-party insurance plays in safeguarding individuals from financial and legal issues related to road accidents cannot be undermined. As a mandatory insurance coverage, this policy ushers in a sense of responsible driving for vehicle owners.

Once you understand how important this insurance policy is and why you must do what you are legally required to, your contribution will make the roads safe for all.