Liability Coverage Requirements

As per the Motor Vehicles Act, 1988, a third-party motor insurance is a requirement for all vehicle owners in India. This type of insurance includes coverage against any legal liability arising out of the use of the insured vehicle that causes bodily injury, death, or property damage to a third party. The policy covers the insured’s legal liability for compensation to third parties.

Compensation Norms

If as a result of an unfortunate event, the insured vehicle were to cause harm to a third party, the third party can claim compensation under the third party motor insurance policy. The compensation amount is determined by the extent of injuries or damages caused. The insurance firm will evaluate the claim and hand over the compensation sum as per the policies and conditions of the agreement.

Impact on Car Owners & Insurers

Car owners are the ones to gain by having third party motor insurance as it is going to be there for them financially in case of any legal liabilities that the owners might have to face due to accidents involving their car. At the same time, insurers are exposed to the danger of having to make higher payouts in claims which will affect their financial position. This being the case, it is essential for insurers to accurately assess risks and set premiums in the right way in order to maintain balance between affordability for policyholders and coverage of risks.

Premium & Claim Adjustments

The premium for third party motor insurance is set by the Insurance Regulatory and Development Authority of India (IRDAI) and depends on the cubic capacity of the vehicle. Claim adjustments under third party motor insurance are made by the insurance company after they assess the situation of the issue. It is of the utmost importance for the policyholders to be aware of and follow the claims settlement process and make sure to give the insurance company the right information so that the claim settlement is expedited.