How Do Motor Insurance Third Party Claims Work?

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The increase in the number of vehicles plying on the roads has resulted in a rise in motor accident cases. We all have witnessed an accident, and we might have our share of experiences too. Scuffs to your car or bike are a common occurrence with negligent drivers present on the streets. Although you might be a responsible driver, not everyone is. This makes a motor insurance policy an essential in today’s age.

For the better part of it, a motor insurance policy is mandatory by law. The Motor Vehicles Act makes it compulsory to carry at least third-party insurance policy.

What is covered under your third-party insurance plan?

A comprehensive plan has two components bundled together – a third-party cover and own damages cover. While a comprehensive plan is optional, the third-party cover is a requisite to drive a vehicle legally.

Under a contract of insurance, the policyholder is referred to as first party, the insurer as second party and the person to whom damage or injury is caused as the third party.

Third-party or liability insurance does not cover any injury or damages to you or your vehicle. It covers your liability towards another person which includes any bodily injury or death or damage to third-party property. The insurer reimburses the entire amount in case of death or injury. Whereas the same is capped at ₹7,50,000 for property damage. Medical expenses can also be claimed from the holder of a third-party insurance plan.

Now you may ask, are the premiums regulated for a third party cover?

Yes, the Insurance Regulatory and Development Authority of India (IRDAI) regulates the premium for your third party insurance for bike and cars. Different premiums are charged depending on the cubic capacity of your vehicle.

In case you are the one aggrieved during an accident, here’s what you should do –

  • Approach the police authorities and file a First Information Report (FIR) (if required).
  • Note the details of the third-party insurance cover of the driver.
  • Obtain a copy of the charge sheet registered by the police against the driver.
  • These cases do not fall under the purview of the civil court. You’ll need to hire a motor claims lawyer. This lawyer will file a claim on your behalf with the Motor Accident Claims Tribunal.
  • Claim has to be filed with the tribunal governing the place of the accident or where the claimant resides.

Most times, the drivers opt for an out-of-court settlement. While it is permissible, taking the legal route is recommended in case of an accident involving severe injuries.

Does the process change for no injury to person but only damage to property?

The process for the claim is somewhat similar. One needs to file an FIR and obtain a charge sheet. This claim can be registered with a local tribunal court, and the judgment is decided after hearing both parties. The maximum amount of compensation is capped at ₹ 7,50,000.

While it might look like a straightforward process, it isn’t easy. Third party car insurance or bike insurance claim settlement is cumbersome. Make sure you note the registration number of the vehicle at fault for filing claims. Lastly, opting for a comprehensive cover to receive a wholesome coverage is handy.