Third-Party Insurance prefers to motor vehicles mainly. Third-party insurance is an insurance to prevent the claims of other Third-Party insurance is compulsory under the Motor Vehicles Act. This rule for that citizen who drives owns and buys a motor vehicle. It is known as third-party insurance because the insurance beneficiary is someone other who is not involved in the contract of insurance; the parties who are involved in the contract are the motor owner and the insurance company.
Third-Party insurance offers coverage of losses caused by the vehicle but it comes in work when the vehicle is run by the insured one, it saves you against claims of damages, accidental liability, and medical expense spends in the event of injury or sometimes death too of any third party.
Table of Contents
- 1 How Third-Party Insurance Works?
- 2 Pros And Cons
- 3 Pros Of Third-Party Insurance
- 4 Cons Of Third-Party Insurance
How Third-Party Insurance Works?
There is a very simple working of Third-Party insurance; it pays to the person caused damage by you. Third-party insurance is a type of insurance purchased by an insured (first-party) from the insurance company (second-party) to protect themselves against the claims of another (third-party). We can categorize automobile third-party liability coverage. First, is a bold injury done by your vehicle to a third-party person, includes hospital charges, lost wages, etc. Second, is property damage by your vehicle to a third-party person, includes loss of use of structure, etc.
Pros And Cons
If a thing has its pros then there are also its cons too. Pros and Cons both are available in third-party insurance. Third-Party insurance is pros and cons for both the first-party as well as third-party. Just think third-party insurance is just like a coin, Pros and Cons are faces of the third-party insurance.
Pros Of Third-Party Insurance
There are a lot of pros available for third-party insurance. Some of them which are valuable and important are: –
Try to save from legal actions and financial assistance
Third-Party insurance directly helps and provides cover to the insurer (first-party) from any legal action taken on it in case of accident or death of any third party. In this third-party is the beneficiary is neither insurer (first-party) nor insurance company (second-party), the beneficiary is the third party directly.
Third-party saves the insurer from the financial assistance on behalf of third party which was injured by the insurer (first-party).
Provide Peace To Mind
Another pros of third-party insurance to the insurer (first-party) is a relief and stress-free driving and traveling, that the insurer had done third-party insurance which ensures the insurer that in any miss happening case he is much safer because of the third-party insurance policy purchase. If by chance something happened then the insurer can also take less stress of financial and legal actions.
Easy and Fast to purchase Third-Party Insurance
One of the fastest and easy insurance policies to purchase is the Third-Party insurance policy. It is easy to purchase and renew too. Third-Party insurance can be bought online on the policy company’s official website. One other important point in this pro is availability; Third-Party Insurance is available for everyone who owns a motor vehicle.
Effective and beneficial for Insurer
Third-party insurance is effective and beneficial for the insurer for then the expectation of insurer; third-party insurance is extremely effective and beneficial in terms of final costs and premiums. When an insurer does the calculation with and without third-party insurance, then the insurer will find that it was a good deal to purchase a third-party insurance policy, third-party insurance will help to pay much less to third-party.
Cons Of Third-Party Insurance
Responsible will be you
One of the most important cons of third-party insurance policy is if any miss happening will happen and your motor vehicle picks up any damage from that miss happening then it will be your risk and you have to pay and do the expenses for the repair of your motor vehicle. If you are responsible for the miss happening then you are also responsible for the repair expenses of your motor vehicle.
Risk on the vehicle
In the case of theft of your vehicle or damage due to fire in your vehicle no will take the responsibility of that, the only is responsible for that miss happening, is you. If you want to save your expense for repair your motor vehicle then you can upgrade your third-party insurance policy to third-party fire and theft policy.
Hey, I’m Sachin. I’m a Blogger living in India. Guide for Personal Finance Planning & financial planning, Tax, Investment, Managing Money, Insurance, Retirement, Real Estate and Loans & more.