All about third party two wheeler insurance

Having a motor insurance policy is mandatory in India for all the vehicles plying on the Indian roads. And in that case, even two wheeler need to be insured with an insurance policy. The Motor Vehicles Act, 1988 makes it necessary for every bike owner in India to insure his vehicle with a third party insurance policy.

In simple terms, third party insurance/third party liability policy is an insurance cover that protects the bike owner against any third party – person/property damage. In a third party insurance, first party is the vehicle owner, the second party is the company and the third party is any person/property to whom the damage is caused.

Coverage provided under third party insurance. 

Third party insurance provides coverage for the following things:

1. Death or bodily injury to the third party: A two-wheeler insurance policy provides coverage against any bodily injury caused to any third party. In case of death or physical disability of the third party, the policy compensates the third party. The damaged third party can claim for loss of income if he/she is not able to work due to sustained injuries caused by the accident.

2. Third Party Property Damage: The insurance policy covers property damages of up to Rs1 lakh.

3. Death of the owner or driver of the bike: If the third party dies due to an accident caused due to the bike owner, then his/her dependents are eligible to claim compensation for the sudden income loss.      

Common mistakes to avoid when filing third-party insurance claim

1. Not calling the police:

When involved in an accident, there can be chances when the other party would try settling the matter with you, without involving the police. Never accept this and immediately involve the police even if you are at fault. Not informing the police of the road accident caused can land you in trouble and also lead to claim rejection. Remember, FIR is a mandatory document that you will have to produce to support your third party claim. 

• Do not run away from the spot - Do not run away from the spot of the accident or move the vehicle unless the police reach the spot. 
• Do not panic - Though it is obvious for you to get panic in such a situation, it is always advised that you keep your head cool and do not do anything that would land you in further trouble. Do not be angry or try to resolve the incident with the third party on your own. Involve the police and do not take the entire blame on yourself. 

2. Inform the insurance company:

When you have caused an accident, it is advised that you inform the insurer as soon as possible. This will ensure hassle-free and quick claim settlement. Ideally, insurance companies require you to inform them about the accident within 48 hours. 

For Third Party Claims

• Lodge an FIR: To register third party claim, you or the aggrieved party will have to file an FIR at the nearby police station of the area in which the accident has taken place. On registering the FIR, collect the copy as you will require it at the time of filing the claim.
• Share your policy documents.

To help the third party file the claim, you will have to share your policy documents with them to process the claim process.

• Claiming in Motor Tribunal: As per the Motor Vehicle Act 1988, all the claims are to be settled under the Motor Accident Claims Tribunal. The claim has to be filed in the Tribunal by the third-party.

Points to remember when filing third party claim

There is no limit on the compensation for death or disablement of the aggrieved party. The compensation amount provided to depends on a number of factors including the income of the aggrieved party.

• Coverage for third party property is limited up to Rs. 7, 50,000.
• Any compensation amount over and above this has to be borne by the car owner.

Note: With various parties, including eye-witnesses, allegations, etc. third party claims may not be resolved as fast as you would expect. Thus, in most cases, the parties involved in the accident settle the claim amicably outside the tribunal.