All You Need to Know About third party liability in car insurance

What is the third party liability in car insurance?

The third party liability is a term used to refer to a type of risk cover with which you are compensated by your insurer to the extent of the legal liabilities of yours in case of an unfortunate event. The third party insurance has become mandatory as per the section 146 of the motor vehicle act 1988.  So to ply your vehicles on the roads of India, one need to have this insurance compulsorily.

Why is it needed?

Now while driving, sometimes accidents may happen. It may cause injury to the person who may meet with such an incident. Also the property damages may happen too. So to cover up for these risks, the ‘Third party liability car insurance’ is done.  It is considered to be a must have as this insurance provides a coverage for both you and the third party who may get injured in the accident. By having this insurance one can protect themselves and their family in the long run and also minimize risks with the help of law compliance’s.

What all things are covered in the third party liability in car insurance?

This insurance provides coverage of the bodily injury or death of any person who may get trapped in the accident. It also includes the occupant that were n the vehicles at the time of accident.

It also provides coverage to all the property that may have gotten damaged. The property that covered in the insurance may belong to either the person who is insured or the item that are held in trust if the person who is insured.

How much would it cost?

Usually the third party liability in car insurance is affordable as it is very cheap in price. If you want to buy a third party liability in car insurance which would cover all the damages tat may happen to you or the third party liability, usually costs in the range of INR 10,000 or INR 12,000.  And in case if you are willing to buy a cover for only the third party liability, then it would cost even less and approx INR 1000 or something.  Also there are very slight chances that you may find a difference in the pricing among the various insurers. This is mainly because the third party insure is something which is mandated by the law and hence no matter which ever insurer you choose, you will have to pay almost the same amount of premium.

What are the various documents that are needed at the time of claim?

The several documents that are needed at the time of claim are as follow-

  • A claim for duly signed by the insurer
  • RC copy of your vehicle
  • A copy of the policy document
  • Company stamp
  • Copy of your driving license
  • Copy of a police FIR


Thus the third party liability in car insurance is a mandatory insurance cover as it is mandate by the Indian law and also provides coverage securing your financial conditions.


Anum Yoon is the founder and editor of Current on Currency. She loves all things personal finance, which is why you'll find her work all over the PF blogosphere.