If a vehicle is with you, then it is very necessary to have insurance with you under section 146 of the Motor Vehicles Act 1988. If you drive on the road without insurance, you may have to pay a fine of Rs 2,000 for the first time and Rs 4,000 if caught for the second time. If you do not pay the fine, you are also liable to jail for 3 months.
What is Third Party Motor Insurance?:First of all, there is a need to understand third party motor insurance here. In an insurance contract, the first party is called the one who buys the insurance while the second party is the one who sells the insurance. Under the Motor Vehicles Act 1988, a third party is the one whose risk we cover.
How does Third Party Insurance work?: You do not get vehicle cover in third party insurance. For example, you have got third party insurance for your car. You get into an accident with a bike rider on the road, due to which the bike rider gets injured and your car also gets a big dent. But about 50 thousand are spent in getting the bike repaired and treated by the injured person from your car. So under third party insurance, the cover of insurance will be given to the bike rider and not you.
Benefits of third party insurance: There are many benefits of taking third party insurance. Firstly it saves you from the fines of the police. It also gives you cover in case of death in a major accident and serious injury. Along with this, it also reduces your risk towards third parties in an accident with someone else on the road. The reason for the popularity of third party insurance is that it is 50 to 60 percent cheaper than other insurance.
For whom third party insurance is better: People who have two or more vehicles. The car they use less. Third party insurance can be done for that vehicle. This will significantly reduce their per year cost of insurance.