A car insurance acts as a safety net in times of damages and accidents, be it for your vehicle or for others. This where the coverage of your policy comes into the picture. Depending on it, what is covered by your insurer is determined. But for that, you need to know about the different types of parties involved based on which the coverage is decided.
The parties involved in a contract of insurance
A car insurance is a legal contract where the insurer undersigns to safeguard you against different perils. As any other ordinary contract, this insurance policy involves two parties, you, and the insurance company, where you are termed as the first party and the insurer is the second party. Since damages can be sustained by a person other than those mentioned in such contract of insurance, it also mentions the implications for coverage of such events. These persons outside the contract of insurance are called third party.
Buying car insurance online for comprehensive policies provides first-party coverage as well as third-party coverage. But the same is limited in the case of third-party policies. Here are some distinguishing pointers between first-party and third-party in your insurance document.
Scope:You are the first-party policy when you purchase a contract of insurance. The persons who is affected, not being the first-party or second-party are the third-party to the insurance contract.
Coverage:With a comprehensive policy, you can buy first-party as well as third-party coverage. A liability-only plan offers coverage only for third-party damages.
Legal requirement: The Motor Vehicle Act of 1988 makes it mandatory for all car owners to have at least third-party coverage. On the other hand, there is no such mandatory requirement to have first-party coverage.
What is a first-party car insurance claim and what is the process?
Under first-party insurance claims, you, the policyholder, need to submit your insurance claim request to the insurance company. This first-party claim ensures any repairs costs to your vehicle are covered under the insurance. First-party claim can be made for either an accident, death or even theft of your vehicle. Here’s how you can raise one –
- For accident claims, make sure you have noted down the vehicle’s registration number involved during the accident.
- The starting point in case of theft is by registering a first information report or FIR.
- This is followed by reporting the damage or theft to insurance company.
- Next, submit the claim form with all particulars filled. Make sure to complete this step before the stipulated time to file a claim.
- For cashless claims, the repairs can be carried out only after the surveyor completes the assessment of the damage. The same is not the case for reimbursement claims.
What is a third-party car insurance claim and its process?
A third-party claim is where the injury or damage is caused to a person outside the contract of insurance. Here the compensation is paid to the person who sustains injuries or damages by the insurance company.
To lodge a third-party claim, here’s what you need to do –
- Start with contacting the insurance company reporting them of such damage or accident.
- An FIR needs to be filed by the aggrieved person for such injury or damage. This will form part of the claim documents.
- Submit the claim form along with copy of FIR to the insurance company.
- Third-party claims are settled by the Motor Accident Claims Tribunal. The third person who has sustained damages must file such claim with the tribunal.
- As decided by the tribunal, the insurance company pays for the compensation subject to limitation with regards to property damage.
With the above-mentioned steps, filing a claim be it for first-party repairs or third party car insurance online is simplified. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.