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Manish Sinha
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14 years of vast experience in General Insurance Industry and Motor Underwriting, Digital Underwriting, Underwriting IT, Insurance Motor Products & development.
In India, third-party insurance is mandatory for all car owners. But do you know why insurance for third-party damage is important?Imagine accidentally bumping your car into another vehicle while going to work. This can cause significant damage to the other car or injury to the person driving the car.In such situations, third-party insurance acts as a financial safety net that helps both you and the third party manage car repair costs without any hassle.
Let’s discuss what is 3rd-party car insurance so you can secure your car from unexpected costs due to third-party damage with Reliance Third-Party Car Insurance.
Third-party car insurance protects you against any third-party liabilities caused when driving your vehicle. It provides coverage against losses or damages caused to a third-party person or property. It also covers third-party bodily injury or death.For example, if your car caused any bodily harm to another person in an accident, then third-party liability insurance can help you pay for that person's hospitalisation costs.Similarly, insurance for third-party damage covers the repair costs for third-party property damage caused by your vehicle, along with the legal expenses that could arise due to the accident.
To understand how insurance for third-party works, you must first understand the different parties involved in the entire process. The parties involved include -
The person whose car is insured, i.e., the policyholder or the vehicle owner, is the first party.
The entity that agrees to cover damage costs, i.e., the insurance provider, is the second party.
The person who got injured or received damage from the insured car due to an accident or any other on-road incident.
Here is how the process works.
Buy a third-party car insurance policy online in a few quick steps.
Get third-party only cover to drive around with added peace of mind.
In case your insured car causes any damage to a third party or vehicle, contact your insurer and file a claim request.
After claim approval, choose between a cashless claim for direct settlement between the insurer and the third party or a reimbursement claim to receive the claim amount directly in your bank account.
We at Reliance General Insurance understand the need for affordable and easily accessible third-party car insurance policies to help you in times of need.Our plans offer comprehensive coverage for third-party liabilities. We also have a user-friendly website, a dedicated mobile application and 24/7 customer service to help with all your queries and needs.With our Reliance General Insurance Third-Party Car Insurance policy, you will get the following benefits:
The IRDAI provides the third-party car insurance price, which stays the same across all insurance providers. To understand the car third-party insurance cost range, you must know the key factors that the IRDAI assesses for calculation.
The price will vary depending on your car’s engine capacity (CC). A higher cc is charged a higher premium, and vice versa.
The premium for third-party cover varies depending on the type of car, such as private cars, electric cars, and commercial cars (taxis).
So, from 1st June 2023, the 3rd-party car insurance price is as follows:
For electric cars, the premium is decided based on the battery capacity of the vehicle.
A third-party car insurance plan covers you for –
If you own an old, inexpensive car model, it would be wiser to opt for a third-party car cover, as it is cheaper to repair.
According to the Motor Vehicles Act 1988, third-party insurance is compulsory. All cars, private and commercial, must have valid third-party insurance to drive in India. Failure to comply will result in fines and other legal trouble.
Compulsory third-party car insurance secures individuals, their cars and their properties in accidents that do not involve them directly but cause significant damage or loss.
Car owners are more responsible with their driving. They do so to reduce the risk of filing claims or causing significant damage to another person or their property. This way, the government is encouraging safe driving habits to improve road safety for everyone.
A 3rd-party insurance cover acts as a financial safety net for you and the third party involved. It reduces the burden of recovery or repair costs for the third party and your legal and compensatory expenses.
The third-party car insurance premium amount for private, electric and commercial cars is determined by the Insurance Regulatory and Development Authority of India (IRDAI) based on the vehicle’s engine or battery capacity. Thus, the premium is higher for a higher capacity, and vice versa.
The type of car you own also impacts the third-party car insurance premium price. For instance, the premium for private cars is higher than the premium of electric cars since the IRDAI offers a discount for EVs (15%) and hybrid (7.5%) vehicles.
Your chosen policy tenure also impacts the 3rd-party car insurance premium. For short-term annual plans, the premium will be higher than for long-term plans, which offer continuous coverage for 2-3 years. This is because the combined premium of 3 individual 1-year plans is higher than 1 long-term plan with a promise of a longer commitment to the insurer.
Similar to private cars, commercial cars also have to follow the mandatory rule of purchasing a third-party commercial car insurance policy to drive in India. The scope of coverage for third-party commercial vehicle insurance is the same as private cars, and it includes -
The IRDAI also decides the third-party premium for cars used for hire and for commercial vehicles. The current rates are as follows:
March - 2025, Hyderabad
January - 2025, Shimla
February - 2025, Nalgonda
December - 2024, Pune
January - 2025, Nashik
March - 2025, Bangalore
December - 2024, Nalgonda
February - 2025, Nagpur
If you are driving without a valid third-party car insurance policy in India, you can face a fine of ₹2,000 - ₹4,000 or up to 3 months of imprisonment, depending on the severity of your crime.
If you want combined coverage for third-party and own damage, you can either buy separate policies for each of them or buy a comprehensive car insurance policy.
However, please note that individual plans may be more expensive and require extensive management of both policies, whereas a comprehensive plan offers more benefits and flexibility with cost-effective premiums.
Yes, auto third-party insurance prices are finalised by the IRDAI and depend on the type of car and the vehicle’s engine or battery capacity. Moreover, the car's purpose, between private and commercial, can also impact the final premium amount.
As a third-party car insurance policy does not cover own damages, deductibles are not applicable when claiming third-party insurance. You will have to pay the entire premium offered by the insurance provider.
No, you cannot customise your third-party car insurance with add-ons because the scope of coverage available under this plan is limited to third-party liabilities only.
Yes, some insurers, like Reliance General Insurance, offer the convenience of long-term third-party car insurance policies that provide continuous coverage for 2 or 3 years, depending on your requirements. This way, you enjoy the reduced hassle of annual renewals.
Yes, when you file a third-party claim for a car accident, a surveyor will be sent to assess the severity of damage to the third party’s vehicle or property. Based on the surveyor’s report, a claim settlement amount is finalised.
According to the IRDAI, motor insurance claims should be settled within 7 days of submission of the surveyor’s report. The insurer is also liable to be imposed a penalty for any delays.
*T&C apply: The premium quoted is subject to change in case any alteration is made while generating the final quotation for premium. The premium quoted is subject to change in case any alteration is made while generating the final quotation for premium. For more details on risk factors, terms conditions, brochure, and exclusions, please read the policy wording and CIS carefully before concluding a sale. Details mentioned here are for the product- "A" Policy for Act Liability Insurance, UIN- IRDAN103RP0003V01200102.
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