Third-party car insurance

Third-party car insurance is a type of car insurance that protects you against financial liabilities if your vehicle causes injury, death, or property damage to someone else. Under the Motor Vehicles Act, 1988, having compulsory third-party insurance is mandatory for all vehicles on public roads in India.

It’s important to note that third party insurance does not cover damages to your own car, theft, or natural calamities. For those, a comprehensive car insurance plan is best suited.

What are the key features of third party car insurance?

A 3rd party car insurance policy provides essential liability protection as required by law. The key features of third party motor insurance are outlined below:

• Mandatory by Law: Third party car insurance is mandatory for all vehicles driven on public roads in India to cover third-party liabilities.
• Property Damage Cover: Covers damages to a third party’s vehicle or property, within policy limits.
• Personal Accident Cover: Most policies include a mandatory Personal Accident (PA) cover for the owner-driver, providing a sum insured (typically ₹15 lakh) in the event of permanent disability or death.
• Fixed Premiums: Rates are set by IRDAI and remain the same across insurers for the same vehicle type.

What does third party insurance cover?

In the event of an accident, third party auto insurance helps protect you from legal and financial liabilities by covering the following:

1. Repairs to the third party’s damaged vehicle.
2. Medical treatment and hospital bills for the injured/disabled third party.
3. Compensation in the event of the death of the third party.
4. Property damage up to ₹7.5 lakh.
5. Unlimited financial compensation in case of third-party fatalities.
6. Legal expenses and court fees if you are sued.

Why is third-party insurance important?

Third party auto insurance is essential because it protects you from legal and financial consequences in case of an accident involving another person. Driving without insurance for a third party is illegal and can lead to fines, license suspension, or even imprisonment. It ensures you are not personally responsible for costly claims in case of an accident.

What are the key benefits of third-party insurance?

While third party motor insurance is a legal requirement, it offers several practical advantages that help protect you from external financial and legal liabilities.

• Legal Compliance: Fulfills the third-party insurance requirement under the Motor Vehicles Act 1988, allowing you to drive legally on Indian roads.
• Unlimited Liability Cover: Provides unlimited coverage for third-party bodily injury or death, preventing severe financial strain.
• Financial Protection: Shields you from high compensation costs arising from third-party injury or property damage claims.
• Lower Premium Cost: The third party car insurance price is significantly lower than the comprehensive plans, making it the most affordable motor insurance option.
• Fixed and Transparent Rates: Premiums are regulated by IRDAI, ensuring uniform 3rd party car insurance cost across insurers for the same vehicle category.

Third-Party insurance premium rates (2026)

In India, the third-party car insurance price is not set by individual insurance companies. Instead, it is strictly regulated and revised annually by the IRDAI (Insurance Regulatory and Development Authority of India).

The cost of 3rd party car insurance depends mainly on engine capacity rather than the car’s market value. As these rates are fixed, the car third party insurance cost remains the same across insurers for the same vehicle category.

Premium Rates for Fuel Cars:

Premium Rates for Electric Car:

Why is third-party insurance not enough?

While third party car insurance is mandatory under Indian law, it offers only basic liability protection. It is designed to cover losses suffered by others, not the policyholder. As a result, several common risks remain uninsured under third party vehicle insurance. This means any damage or loss to your own car must be paid for out of your own pocket.

What 3rd party car insurance is not covered:

• Own Vehicle Damage: Accident-related damage to your own car.
• Theft or Vandalism: Losses due to theft, burglary, or malicious acts.
• Natural Calamities: Damage from floods, storms, earthquakes, etc.
• Owner’s Medical Expenses: Treatment costs for injuries to the driver.
• Mechanical Breakdowns: Repair costs due to wear and tear or technical faults. For complete protection, consider a comprehensive car insurance plan.

Comprehensive Vs Third-Party Car Insurance

Choosing between these two depends on whether you want basic legal compliance or a complete financial safety net for your vehicle. While third party insurance covers only external liabilities, a comprehensive plan acts as an all-in-one shield for both you and your car.

How does third party liability insurance work?

Understanding the workflow of third-party motor insurance is important because it is a liability cover. The process primarily focuses on the victim (the third party) rather than the policyholder.

Let’s understand how it works:

• Incident: You accidentally hit a third party’s vehicle or person.
• Informing the insurer: You must inform your insurance company about the accident as soon as possible, even if your own car is not damaged.
• Legal process: In India, most third-party car insurance claims are handled through the Motor Accident Claims Tribunal (MACT).
• Compensation payout: The court decides the compensation based on the injuries or damages involved, and your insurer pays the amount directly to the affected third party, so you are not required to pay from your own pocket.

How to buy/renew third-party insurance online?

Getting your car covered takes less than two minutes. Park+ offers a seamless, one-stop solution to buy or renew your third party car insurance online.

Steps to Follow:

Step 1: Visit the Park+ app or website and navigate to the “Car Insurance” section.

Step 2: Enter your vehicle’s registration number to instantly fetch existing policy details, if available

Step 3: Instantly view and compare the 3rd party car insurance cost, policy features, and terms based on your needs

Step 4: Complete the payment securely online and receive your policy instantly.

How to claim third-party insurance?

If you are involved in an accident, claiming third party insurance requires a systematic approach:

Step 1: Inform Authorities: File an FIR immediately after the accident. Step 2: Notify Insurer: Report the incident to the insurer as soon as possible. Most insurers offer 24/7 support to guide you through the initial steps. Step 3: Document the Scene: Take photos of the damage to both vehicles and gather contact information from any witnesses. Step 4: The Legal Process: Third-party claims are typically settled via the Motor Accident Claims Tribunal (MACT). Your insurer will represent you and participate in tribunal proceedings until compensation is legally decided.

What documents are required for a third-party insurance claim?

To ensure your third party motor insurance online claim is processed without hiccups, keep these digital copies ready:

1. Insurance policy document
2. Registration Certificate (RC)
3. Driving Licence (DL)
4. Evidence of the incident.
5. FIR copy
6. Duly filled and signed claim form.

Tips to get the cheapest third party car insurance

Securing the best deal on third party car insurance online doesn't mean you have to compromise on quality.

Here is how you can keep your costs low:

1. Direct Comparison: Use the Park+ app to compare plans from multiple insurers at once and find the most suitable 3rd party car insurance price without any hassle.
2. Avoid Lapses: Renew your policy before it expires to avoid coverage gaps, penalties, or the need for a fresh vehicle inspection.
3. Choose Long-Term Plans: Opting for long-term third party car insurance helps you lock in coverage for multiple years and reduces the risk of missing renewals.

What are the factors affecting third-party car insurance?

The cost of 3rd party car insurance is not based on your car’s market value but is determined by a few standard factors set by regulators.

• Engine capacity Cars with higher engine capacity attract a higher third-party insurance premium.
• Vehicle type Premiums differ for private and commercial vehicles due to varying usage risks.
• Policy tenure Choosing a longer policy term can affect the overall cost and how often you need to renew.
• Battery power (kWh) For electric vehicles, the premium is determined by the battery’s kilowatt-hour rating.
• Regulatory changes Premium rates may change whenever IRDAI revises third-party insurance tariffs.

Which factors determine third-party car insurance?

The specific online third party car insurance premium is calculated based on few key factors:

1. IRDAI Mandates: The regulator sets standard rates for each vehicle category annually, keeping premiums consistent across insurers.
2. Engine or Battery: For petrol/diesel cars, cubic capacity (CC) matters, for electric vehicles, the battery’s kilowatt-hour (kWh) rating determines the premium slab.
3. Location: Cars registered in high-traffic metro areas (Zone A) usually have higher premiums than those in quieter cities (Zone B).
4. Vehicle Age & Model: Older vehicles or certain models may carry slightly higher risk profiles, though rates stay fixed within the engine/battery category.
5. Vehicle Type & Usage: Private cars generally attract lower premiums than commercial vehicles, which face more road time and higher liability risks.

Points to consider when choosing a third-party car insurance provider

When you browse for third party insurance of car online, look beyond just the price tag. Keep these points in mind:

• Claim Settlement Ratio (CSR): Pick an insurer with a high CSR to be confident they reliably settle claims.
• Digital Convenience: Choose a provider that offers easy online document storage and quick renewals.
• Customer Support: Opt for a company with 24/7 assistance, since accidents can happen anytime.
• Policy Transparency: Look for clear terms and conditions so you know exactly what is covered and what isn’t.

Having third party car insurance is essential to stay legally protected and cover potential financial liabilities. Park+ makes it simple for modern car owners to buy, renew, and manage claims with instant quotes, automated reminders, and a smooth, hassle-free process—all in one app.