TP insurance basically provides coverage against any financial liability to the vehicle owner arising from harm to a third person, including demise, disability, bodily injury, and damage to the third person’s vehicle or property. Insurance companies compensate the insured to the extent of their legal liability. The amount of compensation for damage to vehicle or property is capped at a maximum of Rs 750,000, according to the Indian Motor Tariff guidelines. “Having third party insurance can save you from legal repercussions. It also gives peace of mind to anybody owning or driving a motor vehicle, especially if a traumatic situation arises," says Kumar of Universal Sompo.
At the time of buying a third party motor insurance, share correct details of your vehicle. Also, make yourself aware of what exactly your policy covers, including all terms and conditions.
Experts, however, say that those who can afford it should opt for a comprehensive motor cover. They should take the benefit of declining costs of comprehensive cover. Several insurers have reduced their Own Damage (OD) part of motor insurance premiums by 5-20 per cent. The reduction has happened due to IRDAI's Motor Insurance Service Provider (MISP) guidelines, implemented from November 1, 2017. “The new regulations have created some space for insurers to increase OD discounts," says Tarun Mathur, director, Policybazaar. Companies like ICICI Lombard General Insurance Ltd, Universal Sompo General Insurance and Bajaj Allianz General Insurance Co. Ltd have already reduced their premiums. “The reduction in prices is chiefly owing to the impact of goods and services tax (GST)," says Amitabh Jain, head–motor and health underwriting and claims, ICICI Lombard General Insurance. Vehicle owners opting for a comprehensive cover should make the most of this development.