Choosing the ideal liability coverage for your car insurance

In India, you cannot drive a vehicle without having liability insurance coverage. Driving a vehicle without liability insurance is a legal offence. Also known as third-party insurance, it protects you against the damage caused to a third party or its property due to your fault. Third-party insurance is cheaper compared to comprehensive coverage as it only covers third-party liability. If you are looking for new car insurance, keep reading this blog to learn about liability coverage and how to choose the ideal car insurance.

Meaning of third-party car insurance

Third-party car insurance provides coverage against any third-party claims due to damage caused by you. Any damage caused to the insured or the insured vehicle is not covered under third-party liability coverage. There are three parties involved in liability coverage.

1. First party

The first party refers to the policyholder or the car owner who has purchased car insurance for his car on payment of a premium amount.

2. Second party

The second party refers to the insurance company or the insurer which protects against any third-party liability in exchange for a premium.

3. Third-party

The third-party refers to another person who has suffered a loss/damage to life or property caused by the policyholder or the first person. It is the third party that gets the claim amount.

So, in this type of car insurance, there is a contract between the first party and the second party where the second party agrees to cover the legal liability of a third party in return for a fee and it is the third party that gets the claim or coverage amount.

Factors to consider while selecting a third-party car insurance

The following are the factors that you should consider while selecting liability coverage for your car.

1. Coverage amount

The maximum coverage available under third-party car insurance is up to ₹ 7.5 lakhs. However, you can opt for a lower amount to keep the premium on the lower side. The premium amount also depends on the type of car and the scope of coverage.

2. Type of car

Both private and commercial vehicles are covered under third-party insurance. The base premium for different types of private cars as specified by IRDAI, is given below

3. Third-party liability cover

Third-party liability cover includes coverage for financial liability in the following scenarios.

• Damage to a third-party vehicle caused by the insured vehicle

• Damage to a third-party property

• Injury or loss of life caused by the insured.

4. Personal accident cover

A personal accident cover of up to ₹ 2 lakhs is available for private and commercial vehicles in case of an accident causing personal total disability or the death of the driver or car owner.

Conclusion

It is always recommended to buy car insurance online so that you can easily compare car insurance quotes for different types of car insurance and different types of cars. When buying car insurance always go for comprehensive coverage because it covers both third-party liability and own damage. Explore a wide range of Zurich Kotak General Insurance plans to get the best coverage for your car.

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