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Saturday, April 23, 2016

Five Points - Third-Party Motor Insurance..!

By on Saturday, April 23, 2016

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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