You drive either a two-wheeler or a four-wheeler, you must have all the documents. One of the documents is related to insurance and thus you have to insure your vehicle every year. The Ministry of Road Transport and Highways has made changes in the rules, after which, driving on the road now without insurance can cost you heavily. But insurance policies also vary.
Often we hear about First Party and Third Party Insurance. However, most people are not aware of the advantages and disadvantages of these policies. If you also want to know what is the difference between first party and third party insurance, then we will try to explain it to you through this article.
What Happens in Third Party Insurance?
Third party insurance is the one in which you do not get a claim for an accident that happened by you, but the one who suffered because of you gets the claim. Suppose your bike or car collides with another bike or car, then your insurance company pays for the loss due to the accident to the person who suffered because of you. In third party insurance, even if your bike or car is stolen, you do not get its claim. Because theft is not covered in this and under third party insurance only the opposite party gets the benefit . Thus, this insurance actually does not have any benefits for the vehicle owner. Then why do people go for it? Because it is cheap and so can be done just to complete documents of your vehicle.
First Party Insurance:
First party insurance can be done with zero depreciation, in which everything is covered. In this insurance policy, you get all the things – your car’s damage, your physical damage, damage of the vehicle by which your car collides and the opposite party’s physical damage. Even if the vehicle is stolen or badly damaged under this insurance, you get a claim from the company. In insurance with zero depreciation, you can take a claim twice a year.
According to the new traffic rules, for driving without insurance, a fine of Rs 2,000 or jail for 3 months or both can be done simultaneously.
First Party Insurance 50% Claim:
This is also first party insurance, but it has term and conditions;, under which the insurance company compensates 50 percent of the damage in case of an accident and the vehicle owner has to make 50 percent compensation. Compulsory insurance is for the owner and driver of the vehicle. Road accident cover can be increased by more than Rs 15 lakh on taking Comprehensive Insurance, whereas compulsory accident insurance in third party insurance is available up to 15 lakh only.