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A Guide to Commercial Vehicle Third Party Insurance

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Driving commercial vehicles always includes a considerable amount of risk due to the huge gross vehicle weight of trucks, high turning radius, potholes and undulations on roads, inadequate use of safety strategies, and enormous vehicle densities. Additionally, impatience while driving, constant pressure from clients in meeting deadlines during delivery, and lack of experience leads to a high incidence of motor accidents. Every day, when we flip on the pages of newspapers, we come across reports of gruesome collisions across the length and breadth of the country. In such a scenario, third party insurance for a commercial vehicle can help you cover all legal liabilities. The Motor Vehicles Act, 1988 made it compulsory for all vehicles plying on Indian roads to remain armoured with at least a third-party insurance.

What is Third-Party Insurance for Commercial Vehicles?

The term commercial vehicle third party insurance signifies a policy where a beneficiary is a third person other than the two individuals involved in the contract. Before going into the details of the third-party plan, let us understand these terms briefly. Whenever we talk about insurance policies, the commercial vehicle owner or the policyholder becomes the first party, the insurance company is the second party, and the owner of the other vehicle involved in a collision with the first party vehicle is the third party. So, we can say that the third party insurance coverage safeguards damages incurred on other automobiles.

What are the Coverages of a Third Party Insurance Plan?

The third party liability includes:

  • Protection for damages incurred on a third party vehicle. Here the insurer bears the repairing charges of the other automobile.
  • This type of insurance policy also takes care of the medical bills and hospital stay of the driver of the third-party vehicle. In case of death of the driver, the insurance company becomes liable to pay the compensation value as decided by the court.
  • Property damages of the third party during accidents of the insured vehicle also get covered under third party claims.

When can You Raise a Third Party Claim from the Insurance Company?

According to the Motor Vehicles Act, 1988, a third party vehicle can only ask for claims under two circumstances- no-fault liability claims or fault liability claims.

No-fault Liability Claims 

In this case, the collision between the insured vehicle and the third party vehicle occurs by chance. Here the drivers of none of the trucks are at fault during the accident.

Fault Liability Claims 

Here, the driver of the third party vehicle needs to prove that the accident occurred due to the negligence of the driver of the insured commercial vehicle. The claimant needs to establish before the law that the other party was at fault. The compensation, in these cases, rests on the judgement passed by the court. The judge, in most cases, takes the loss of income of the third party driver and residual human asset value into consideration before passing the judgement.

What are the Exclusions in a Commercial Vehicle Third Party Insurance?

There are some circumstances when you cannot make a claim for commercial vehicle third party insurance. They include:

  • Drivers causing damages to third-party automobiles while riding the truck under the influence of alcohol or narcotics.
  • If the rider deliberately causes the collision due to some vested interest, then the insurer will not cover the repairing charges of the other vehicle.
  • If the driver of the insured vehicle does not have a valid license or is underage.
  • Theft or burglary of the owner’s commercial vehicle is also not covered under third-party insurance.
  • Damages incurred on the self-vehicle do not remain protected in this policy.

What are the Benefits of Purchasing a Third-Party Insurance Policy for Commercial Vehicles?

The Motor Vehicles Act has made it compulsory for all vehicles plying on Indian roads to remain under third-party cover. Here are the advantages of this policy:

  • Legal Cover and Financial Assistance

The commercial vehicle third party insurance offers coverage against legal liabilities during a collision with another vehicle. It takes care of the financial burden, including the repairing charges and medical bills of the third party. So, in this type of policy, the direct beneficiary is the owner or the driver of the third party vehicle.

  • Ensures Peace of Mind

Insurance holders can enjoy complete peace of mind when they remain covered under third party coverage, as they do not require to pay hefty repair charges or medical bills for damages to third party vehicle.

  • Affordable Commercial Vehicle Insurance Plan

The premium for third-party commercial vehicle insurance is lower than comprehensive policies because it offers only limited coverage.

  • Convenient Purchase of Plans

You can purchase a third-party commercial vehicle with minimal paperwork and within a few working days. Moreover, you can even renew these plans without any complications.

How Can You Claim a Third-party Insurance?

Whenever your truck meets with an accident with another vehicle, at first inform the police regarding the event. File an FIR, with a brief description of the incident, registration number of the other automobile, name and licence number of the driver, along with the contact details of witnesses. It is also mandatory to procure the charge sheet while applying for the claim. Next, you have to register a case at the Motor Accident Claims Tribunal (MACT) at the court nearest to the accident site. The court settles the claim and forms a decision regarding the liability.

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