What is Liability - Only Coverage and What Does it Include?

If you own a car, having car insurance should be at the top of your to-do list. Liability only coverage is also commonly known as third-party insurance. It is mandatory to have third-party liability insurance, as it is the minimum coverage required as per the Motor Vehicles Act of 1988. Liability car insurance is a type of vehicle insurance that covers damage and injuries you cause to other people and their property.

In this article, we'll take a closer look at what liability-only coverage is, what it includes and excludes, and why it's important to have.

What is Third-Party Liability Insurance?

Third-party liability insurance, also known as liability car insurance, is the minimum coverage required by law in India. Liability car insurance does not cover damage to your own vehicle or injuries you sustain in an accident. Liability-only coverage includes two main types of protection: third-party property damage and third-party bodily injury.

Features of Liability-Only Cover in Motor Insurance

Below are the features of basic third-party liability insurance:

1. Third-Party liability insurance coverage provides financial protection against legal liabilities arising from injury or death of a third party.

2. It covers damage caused to a third party's property, up to the specified policy limit.

3. As per the Motor Vehicles Act, having liability-only insurance is compulsory for all vehicle owners in India.

4. The policy is cost-effective since it offers limited coverage focused on third-party liabilities.

5. Provides support in legal proceedings related to third-party claims arising from accidents.

What are the inclusions in a Third-Party Liability Insurance Cover

The third-party liability insurance coverage offers the following inclusions:

1. Third-Party Injury or Death

The insurance covers legal liabilities arising from accidental injuries or fatalities involving third parties.

2. Property Damage

A third-party liability insurance provides compensation for damages caused to a third party's property, with limits specified under the policy.

3. Personal Accident Cover for Owner-Driver

A basic third -party liability insurance includes mandatory personal accident coverage for the vehicle's owner-driver in case of death or disability.

4. Legal Liability to Paid Drivers

The insurance covers liabilities for injuries or damages caused by a hired driver operating the insured vehicle.

5. Legal Costs

Third-party liability insurance offers coverage for legal expenses associated with third-party claims resulting from an accident.

Also Read: When Should Your Motorcycle's Oil and Oil Filter Be Changed?

Exclusions of a Liability-Only Cover

While third-party liability insurance provides important protection, it does not cover everything. Here are a few things that liability-only coverage does not cover:

1. Damage to your own vehicle

If you are at fault in an accident, liability-only coverage will not pay for the damage to your own vehicle. You will need to purchase additional coverage, such as collision coverage or comprehensive coverage, to protect your own vehicle.

Liability-only coverage does not provide any protection for injuries you sustain in an accident. However, the personal accident cover, which is also mandatory for motor vehicle owners in India, can take care of major accidental injuries.

2. Theft or vandalism

Liability-only coverage does not provide any protection for theft or vandalism of your vehicle. You will need to purchase additional coverage, such as comprehensive coverage, to protect against these risks.

3. Damage due to natural or manmade disasters

If your car suffers damage due to any manmade or natural disaster, the expenses for your car’s repair won’t be covered under liability-only coverage.

Since liability-only insurance does not cover your own vehicle against several common risks, a comprehensive car insurance policy from Bajaj General Insurance can help provide broader financial protection.

Why is Liability-Only Coverage Important?

Liability-only coverage is important for several reasons, such as:

1. It is a legal requirement in India. If you are caught driving without insurance, you can be fined or even have your license suspended. Liability-only coverage provides the minimum coverage required by law, ensuring that you are legally compliant.

2. Liability-only coverage provides financial protection in case you cause damage to someone else's property or injure them in an accident. Without liability insurance, you would be personally responsible for paying for any damages or injuries you cause, which can be extremely expensive.

3. Liability-only coverage can be an affordable vehicle insurance option from Bajaj General Insurance within your budget. While additional coverage is important for protecting your own vehicle and injuries, liability-only coverage provides the minimum level of protection required by law at a lower cost.

What is the Process to Claim Third-Party Insurance?

To get compensation from the insurance company, the policyholder must follow the following steps:

1. The insured must inform the insurance company about the accident within the time duration as mentioned in the policy document.

2. The policyholder must file an FIR at the nearest police station from the accident spot.

3. They can file a third-party insurance claim by filling out the form and submitting the necessary documents.

4. The insurer will send a surveyor to assess the damage and verify the estimated cost. After the assessment, the surveyor files a report.

5. Based on the report, the insurer settles the claim.

Why Should You Buy Comprehensive Coverage?

When wondering whether to opt for comprehensive coverage, it is important to consider your budget and the type of protection you need. If you have a new or expensive vehicle, comprehensive coverage may be a better option to protect your investment. However, if you have an older vehicle, third-party liability insurance can be a cost-effective option.

While comprehensive insurance coverage provides more comprehensive protection, it is also more expensive than liability-only coverage. The cost of comprehensive coverage depends on a variety of factors, including the make and model of your vehicle, your driving history, and the coverage limits you choose.

Also Read: How Do Age And Gender Affect Car Insurance Rates?

Final Thoughts

Third-Party Liability insurance is the minimum coverage required by law in India. It provides important protection in case you cause damage to someone else's property or injure them in an accident. Hence, you must have liability-only vehicle insurance and comply with the law as well as protect your finances.

Overall, whether you opt for liability-only or comprehensive coverage, choose a car insurance policy from Bajaj General Insurance that aligns with your protection needs and helps you stay compliant with legal requirements.

Frequently Asked Questions

What is covered under third-party liability insurance?

Third-party liability insurance pays for damage or injuries you cause to others, but it won't cover your own losses.

Is third-party insurance available for both private and commercial vehicles?

Yes, third-party insurance is available for all motor vehicles, including private cars, two-wheelers, and commercial vehicles. 

How to file a third-party insurance claim after an accident?

After an accident, file an FIR and contact your insurer. If the third party claims compensation via the MACT, your insurer pays the decided amount directly to them.

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