A third-party liability arises when you are responsible for causing damages to another person or their property because of your vehicle. The following types of damages are covered -
In the event of an accident, third-party insurance covers the damage done to the property of another person. It has a compensation limit of 7.5 lakhs.
Let's see how the property damage is covered under different scenarios:
Example 1:While parking your car, you hit and damage a food stall. You need to pay the owner Rs 30,000 as compensation. The policy will cover the costs of the same.
Example 2: Your car bumps into another car on the road, causing severe damage to the other person's car. In this instance, the insurance company will cover the repair costs of the other person's vehicle.
Accidental bodily injuries
The policy also covers the costs arising from causing permanent disability to another person.
For instance, while reversing your car, you accidentally hit a person waiting to catch a bus. The rear-end collision caused severe damage to the victim’s spine resulting in permanent disability. Your third-party coverage will compensate that person based on the amount awarded by the court.
Similarly, in case of accidental death, there is no limit on the coverage. When your vehicle hits someone, and they die on the spot due to the impact, your third-party insurance will cover the cost of compensating the family members of the deceased person based on the compensation awarded by the court.