{"id":2288,"date":"2021-01-14T17:34:02","date_gmt":"2021-01-14T12:04:02","guid":{"rendered":"https:\/\/blog.tickertape.in\/?p=2288"},"modified":"2021-01-18T12:36:03","modified_gmt":"2021-01-18T07:06:03","slug":"what-is-third-party-insurance","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/what-is-third-party-insurance\/","title":{"rendered":"What is third party insurance?"},"content":{"rendered":"\n<p>An insurance policy offers monetary protection against contingencies. Insurance is of two broad types: life insurance and general insurance. In this article, we discuss third party insurance, a subset of general insurance.<\/p>\n\n\n\n<p><strong>The article covers:<\/strong><\/p>\n\n\n\n<p><a href=\"#3rd\">What is third party insurance?<\/a><\/p>\n\n\n\n<p><a href=\"#Inclusions\">Inclusions and exclusions of a third party insurance policy<\/a><\/p>\n\n\n\n<p><a href=\"#Terms\">Terminologies used in a third party insurance policy<\/a><\/p>\n\n\n\n<p><a href=\"#Types\">Types of third party insurance<\/a><\/p>\n\n\n\n<p><a href=\"#Work\">How does a third party insurance policy work?<\/a><\/p>\n\n\n\n<p><a href=\"#Significance\">Significance of a third party insurance cover<\/a><\/p>\n\n\n\n<p><a href=\"#Details\">Details to be furnished when submitting a claim<\/a><\/p>\n\n\n\n<p><a href=\"#Process\">Process to claim third party insurance<\/a><\/p>\n\n\n\n<p><a href=\"#Comprehensive\">Comprehensive insurance policy<\/a><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/what-is-third-party-insurance\/#What-is-third-party-insurance\" title=\"What is third party insurance?\">What is third party insurance?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/what-is-third-party-insurance\/#Inclusions-and-exclusions-of-a-third-party-insurance-policy\" title=\"Inclusions and exclusions of a third party insurance policy\">Inclusions and exclusions of a third party insurance policy<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/what-is-third-party-insurance\/#Inclusions\" title=\"Inclusions\">Inclusions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/what-is-third-party-insurance\/#Exclusions\" title=\"Exclusions\">Exclusions<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/what-is-third-party-insurance\/#Terminologies-used-in-a-third-party-insurance-policy\" title=\"Terminologies used in a third party insurance policy\">Terminologies used in a third party insurance policy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/what-is-third-party-insurance\/#Types-of-third-party-insurance\" title=\"Types of third party insurance\">Types of third party insurance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/what-is-third-party-insurance\/#How-does-a-third-party-insurance-policy-work\" title=\"How does a third party insurance policy work?\">How does a third party insurance policy work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/what-is-third-party-insurance\/#Significance-of-a-third-party-insurance-cover\" title=\"Significance of a third party insurance cover\">Significance of a third party insurance cover<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/what-is-third-party-insurance\/#Details-to-be-furnished-when-submitting-a-claim\" title=\"Details to be furnished when submitting a claim\">Details to be furnished when submitting a claim<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/what-is-third-party-insurance\/#Process-to-claim-third-party-insurance\" title=\"Process to claim third party insurance\">Process to claim third party insurance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/what-is-third-party-insurance\/#Comprehensive-insurance-policy\" title=\"Comprehensive insurance policy\">Comprehensive insurance policy<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"3rd\"><span class=\"ez-toc-section\" id=\"What-is-third-party-insurance\"><\/span><strong>What is third party insurance?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The name \u2018third party\u2019 stems from the fact that the beneficiary of the policy is someone other than the two parties of the contract: the insured (that is, you) and the insurer. Also known as \u2018act-only\u2019 or \u2018liability-only\u2019 insurance, a third party insurance policy offers monetary coverage against a third party\u2019s losses or damages caused by you or your insured asset. However, you, being the insured\/policyholder, will not receive any benefits or compensation on the occurrence of the event.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Inclusions\"><span class=\"ez-toc-section\" id=\"Inclusions-and-exclusions-of-a-third-party-insurance-policy\"><\/span><strong>Inclusions and exclusions of a third party insurance policy<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Inclusions of insurance mean the items\/events covered by a policy and exclusions are those that are not covered. A typical third party insurance cover has the following inclusions and exclusions:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Inclusions\"><\/span><strong>Inclusions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul><li>Monetary protection against the damages caused to the third party by the insured<\/li><li>Damages include death, disability or physical injuries caused to the third party. In addition, damages sustained by the third party\u2019s vehicle or property is also included<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exclusions\"><\/span><strong>Exclusions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul><li>Damages due to an accident caused when driving under the influence of alcohol<\/li><li>The driver is a minor or is guilty of driving without a valid motor driving license<\/li><li>The accident was planned<\/li><li>The vehicle was used for illegal activities or commercial purposes<\/li><li>The vehicle was stolen when the accident occurred<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Terms\"><span class=\"ez-toc-section\" id=\"Terminologies-used-in-a-third-party-insurance-policy\"><\/span><strong>Terminologies used in a <\/strong><strong>third party insurance<\/strong><strong> policy<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Understanding the terminologies used in a third party insurance policy is key to know how the policy works. Note these:<\/p>\n\n\n\n<ul><li>First party: is the insured or the policyholder<\/li><li>Second party: is the insurance company or the insurer<\/li><li>Third party: is the person who sustains damages and claims compensation for damages caused by the first party<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Types\"><span class=\"ez-toc-section\" id=\"Types-of-third-party-insurance\"><\/span><strong>Types of <\/strong><strong>third party insurance<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Talking about the insured property, it can be: a motor vehicle, a rented house or a business premise, depending on the type of the policy. These are called:<\/p>\n\n\n\n<ul><li>Third party accident insurance<\/li><li>Renters\u2019 insurance policy<\/li><li>Business liability insurance<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Work\"><span class=\"ez-toc-section\" id=\"How-does-a-third-party-insurance-policy-work\"><\/span><strong>How does a third party insurance policy work?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A third party insurance policy doesn\u2019t compensate the insured but a person not part of the contract. Let\u2019s take an example of motor vehicle insurance. Having third party insurance for both two and 4-wheelers is a prerequisite in India as per the Motor Vehicles Act. Without it, you can face legal consequences. So this is how the policy works.<\/p>\n\n\n\n<p>In case of an accident caused by your insured vehicle, you\u2019ll be liable to compensate the victim, who will raise a claim against your insurance policy. The insurer will then assess the damage caused and compensate the third party who has sustained injuries\/damages. But the policy doesn\u2019t cover the injuries you sustain or the damages caused to your property\/vehicle. It only covers your financial liability arising due to the death, disability, loss or damage caused to a third party property\/vehicle.<\/p>\n\n\n\n<p>In doing so, a third party cover indirectly protects you by reducing your financial burden. In case of an accident, the insured is required to immediately inform the insurer about the same. On filing the claim, the insurer appoints a surveyor to assess the damage caused and verify the estimated cost of repairs or compensation. After the completion of the verification, the insurer settles the claim.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Significance\"><span class=\"ez-toc-section\" id=\"Significance-of-a-third-party-insurance-cover\"><\/span><strong>Significance of a <\/strong><strong>third party insurance<\/strong><strong> cover<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Knowing that your third party insurance would cover expenses arising from an unprecedented event gives you peace of mind<\/li><li>The third party policy protects your finances against unplanned expenses<\/li><li>The insurance covers the third party\u2019s disability\/personal injury, damages to property, and loss of life<\/li><li>A third party policy has a relatively affordable premium compared to comprehensive policy (discussed later)<\/li><li>A third party insurance policy does not offer monetary protection to the insured but reduces their financial liability by compensating the loss or damage incurred by the third party<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Details\"><span class=\"ez-toc-section\" id=\"Details-to-be-furnished-when-submitting-a-claim\"><\/span><strong>Details to be furnished when submitting a claim<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Gathering details including the following comes in handy when making a claim against third party insurance:<\/p>\n\n\n\n<ul><li>Date, time, and description of the accident<\/li><li>Description of the injuries sustained by the driver, passengers, and\/or the vehicle\/property<\/li><li>Details of the insurance policy and the witnesses<\/li><li>Photographs of evidence from the accident site<\/li><li>Visibility and weather condition at the time when the accident took place<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Process\"><span class=\"ez-toc-section\" id=\"Process-to-claim-third-party-insurance\"><\/span><strong>Process to claim <\/strong><strong>third party insurance<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The process of raising a claim against a third party policy differs from insurer to insurer. However, following are the common steps involved:<\/p>\n\n\n\n<ul><li>Inform the insurer about the accident immediately or within the stipulated time mentioned in the policy document<\/li><li>File an FIR at the police station nearest to the spot of the accident and keep a copy of the same<\/li><li>Submit a duly filled application form along with required documents<\/li><li>The insurer sends a surveyor to assess the damage caused by the accident. The surveyor verifies the estimated cost of repairs<\/li><li>The surveyor files a report based on which the insurer settles the claim<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Comprehensive\"><span class=\"ez-toc-section\" id=\"Comprehensive-insurance-policy\"><\/span><strong>Comprehensive insurance policy<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>By now you know that a third party insurance policy only offers basic financial assistance to a third party so they are compensated for loss\/damage caused by you\/your insured asset. The point is that a third party insurance policy doesn\u2019t cover your losses. That\u2019s where a <a href=\"https:\/\/www.tickertape.in\/blog\/comprehensive-insurance\/\">comprehensive insurance<\/a> policy comes into the picture.<\/p>\n\n\n\n<p>Unlike a third party insurance cover, a comprehensive insurance policy covers your damages and losses in addition to those sustained by the third party. That\u2019s why the premium of the latter is relatively higher than the former one. But let\u2019s not forget that the premium is worth the comprehensive coverage that the policy offers. More about this in the coming days. Stay tuned.<\/p>\n\n\n\n<p>Until then, get your assets insured with a third party insurance policy and protect your finances from unprecedented expenses.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Third party insurance doesn&#8217;t cover the insured, instead it compensates a third person, one who is not a part of the insurance contract<\/p>\n","protected":false},"author":27,"featured_media":2291,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[8,1737],"tags":[201,29,200],"acf":[],"modified_by":"Aradhana Gotur","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/01\/3rd-party-Payment.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/2288"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=2288"}],"version-history":[{"count":1,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/2288\/revisions"}],"predecessor-version":[{"id":2290,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/2288\/revisions\/2290"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/2291"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=2288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=2288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=2288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}