Insurance for vehicles is very important because not only is it a legal necessity, but it is also a sane financial decision. As per Motor Vehicles Act, every vehicle which can go above the speed of 25 km-ph and is powered by an engine or electric motor that can generate power at the rate of anything above 250 watts, must have at least a third-party 2 wheeler insurance cover from a firm authorised by the Insurance Regulatory and Development Authority of India.
If a person is found to be driving a vehicle without a valid third-party bike insurance policy, they will be subject to a challan of Rs. 2000 in the first instance. For subsequent offenses this can be doubled to 4000 Rs. If a person is found to be habitually breaking this law, they can even be sent to jail.
What is Third-party Insurance?
Third-party insurance is a legally mandated insurance contract that is meant to ensure that if your vehicle damages the person or property of any other person, you can make a claim for applicable compensation that you are eligible for. If an accident causes damage to a property, damage to another vehicle, disability, bodily injuries or death of a person, then the vehicle owner is at fault. He/she is liable to pay for the third-party liability caused. One may not have the financial resources to fulfill the third-party liabilities, which is why third-party insurance is made obligatory. This is to ensure that in case of a third-party liability, the car owner at fault does not walk away without taking the onus of his/her mistake.
Things to Know about Third-party Claims
Here are a few things that everyone should know about third-party insurance
- Everyone who wants to drive their vehicle on a public road, must have third-party cover for their vehicle.
- When you purchase a new two-wheeler, you are legally obligated to buy third-party bike insurance for the first five years of your vehicle ownership. After this period, you can buy third-party cover for as long as three years in one go or on an annual basis.
- Third party policy is not transferable. If you sell your vehicle while you hold a third party policy, it will cease to provide any protection within 14 days or when vehicle registration is transferred, whichever is earlier. The person who has purchased your vehicle will have to get their own policy and the authorities will treat the vehicle as uninsured in the meantime.
- Since this is a government-mandated insurance policy, they regulate the prices for the same as well. All insurance companies are required to sell third-party bike insurance at these fixed prices. There are no discounts allowed on this price.
Who can File Third-party Claims?
By its very nature, your third-party bike insurance will not cover the damages caused to your two-wheeler in an accident. If you want to make a claim for third-party insurance, it has to be against the other person with whom you had your accident.
You are the first party in your insurance contract and the insurance company is the second party in your contract. The third party is the person who is not either of these two. So, when someone comes and hits your bike, they are the first party for their insurance contract and the company which sold them their insurance is the second party. You as the victim of the whole incident become the third party in this. Thus, you can file a claim against their insurance but not against your own.
What are the Steps for Third-party Claims?
- First of all, you need to get vehicle details with which you have had an accident. At the very least, you will need to know the registration number of the vehicle with which you had your accident.
- Next you need to visit the local police station where the accident took place. You will be needed to file a proper First Information Report about the whole mishap and obtain a copy of the FIR from the police station as well as a copy of the charge sheet that is filed by them
- The third step is to engage the services of a lawyer who specialises in such matters. In theory, you are allowed to file and plead your own case but not many people have the time and skill to do so. Hiring a lawyer just works out to be a much better deal.
- Now you have to approach the Motor Accident Claims Tribunal! This is somewhat of a specialised court that only deals with matters arising out of motor vehicle accidents. File all the paperwork including your vehicle details, FIR and charge sheet as well as copies of your driving licence etc. and all the other paperwork that is needed.
- Upon getting the paperwork, the MACT will give you a date for trial and they will inform the other party that a claim has been filed against them. They will have to inform their motor insurance company and the company will also send their representative.
- Next comes the time of pleading and trial. You will be required to present your side of the case and the other side will make their representations. Remember that it is your responsibility to prove that the other party was at fault in the event.
- Upon conclusion of the trial, the tribunal will pronounce their judgement. If you are not satisfied with the tribunal’s findings or if the process does not go in your favour you can apply to the tribunal for leave to file an appeal in court.
- If the tribunal pronounces the judgement in your favour, they will tell the insurance company of the other person to pay up the compensation to you.
- You will have to get in touch with the insurance company of the other party to provide them with your banking and other details and may also be required to submit copies of pronouncements from the tribunal before they can process your payout.
Third-party bike insurance is a protection plan bought to cover your liabilities that may occur if you as a car owner are at fault and cause some damage or bodily injury to someone. It is a cushion against the expenses that you are required to bear as a responsible citizen, when a mishap takes place because of your bike.
Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.
