Five Points -
Third-Party Motor Insurance..!
1. The Motor Vehicles Act
makes it mandatory for all vehicle owners to get the motor vehicle insured with
a 3rd-party insurance cover.
2. Third party motor
insurance, also known as an `act only' cover, only covers the liability from
damage in the form of death or / property damage caused to a 3rd party.
3. Third-party insurance does
not cover the death of or / injury to the owner of the vehicle, and any losses
incurred thereof.
4. Premium on third party
liability cover used to be set by the IRDAI.
Now motor insurance companies are free to set the
premium, which is usually low.
5. Third-party insurance claim
is entirely fault-based, as the third party needs to prove that the
policyholder was responsible for the damage caused.
Courtesy : Centre for Investment Education and
Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and
Labdhi Mehta.
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