Liability Only Cover in Motor Insurance
Liability Only Policy is mandatory as per the Indian legal system - it is a Statutory requirement. This policy will cover the third-party/ individual who has been involved in the accident caused by you. When you take a Liability Only Policy, then the loss or damage to your car will not be insured.
Liability only insurance cover is a type of insurance scheme where in the event two vehicles are involved in causing damage to each other’s property and there is a confusion over who is at fault then under a liability only car insurance scheme, the insurers can decide who was at fault and will require to cover the damage caused to the other party. In case you are at fault, the insurance provider will cover the cost of damage.
Likewise, if the at-fault party is the other party, that party's insurance will pay for your damage. An insurance policy known as a "liability only insurance policy" covers the third party and their property or car, but not the insurer or his own vehicle. A liability-only insurance policy for motor vehicles aids in paying for accident-related property damage and injuries to third parties.
Top Banks Providing Liability Only Cover in Car Insurance:
The list of top banks in India who provide Liability Only Car Insurance Cover are given below:
- IDFC First Bank
- IndusInd Bank
- ICICI Bank
- Bank of Baroda
- Axis Bank
- State Bank of India
- India Post Payments Bank
- Kotak Mahindra Bank
- South Indian Bank
- Union Bank of India
What is Covered?
You will be eligible to avail the benefits of Liability Only Cover in Car Insurance if the following conditions are met:
- Claims for injury: A third-party auto insurance coverage will cover the costs related to injuries to third parties. Accidents can result in a wide range of ailments. This covers wounds of any seriousness, and the insurance provider pays for medical costs, freeing the insured party of these financial obligations.
- Partial Disability: The third-party insurance policy kicks in to give compensation in the sad case of a permanent or partial total incapacity incurred by a third party as a result of an accident caused by the insured. The insurance company provides reimbursement on the insured's behalf in circumstances involving the loss of bodily components or functions.
- Damage to Property: The insurance company will pay for losses under this coverage if an accident causes damage to a third party's property.
- Partial Disability: This insurance policy also covers medical costs and reimbursement for partial impairments brought on by an accident involving a third party.
- Death: The insurance provider provides reimbursement to the surviving relatives of the deceased in the event that a third party perishes in a car accident that was the insured's fault. The amount of coverage is determined by a number of variables, including the deceased person's age, profession, and future earnings, and has no set cap.
What is not Covered?
Under the following conditions you cannot avail the benefits of Liability Only Cover in Car Insurance:
- If the damage caused to the other party’s property is due to your fault.
- An employee of the insurer who dies or is injured is not entitled to compensation under the terms of the policy.
- The use of any nuclear material or other weapon, as well as theft-related liabilities, are not included in the liability-only coverage.
Liability Only Insurance Cover in Motor Insurance Eligibility:
The eligibility criteria to apply for Liability Only Insurance Cover in Motor Insurance are given below:
- You must be a citizen of India
- You must be aged 18 years and above
- You must own a registered vehicle.
- You must have a valid driving license
Advantages of Liability Only Insurance Cover in Motor Insurance:
Some of the advantages of Liability Only Insurance Cover in Motor Insurance are given below:
- Peace of Mind: Having third-party liability insurance makes you feel at ease. The coverage protects you against potential legal problems that may result from accidents and is a necessary need.
- Minimal Documentation Process: The procedure of purchasing a third-party auto insurance coverage is quick. The method is simple and takes less time when there is little verification, inspection, and documentation. Choosing to obtain third-party auto insurance online further simplifies and expedites the process.
- Financial Protection Offered: The cost of third-party injuries or deaths, as well as damage to their properties brought on by accidents, is covered by the policy. You would have to pay a lot out of cash if this coverage didn't exist.
- Cost is affordable: Comparing third-party liability insurance to comprehensive policies, it is a more affordable option. The two main causes of this affordability are as follows. First, the Insurance Regulatory and Development Authority of India controls the premium rates for third-party insurance. Second, these insurance schemes provide comparatively lower levels of coverage.
Features of Liability Only Cover in Motor Insurance:
Types of Vehicles covered:
Third Party Liability Insurance can be availed by private vehicles, two-wheelers and commercial vehicles as well. "Liability only" Policies are also applicable on goods carrying vehicles such as public and private carrier, passenger carrying vehicles, etc.
Cover for Third Party Liability:
Any legal liability that arises out of total permanent disability, injury, death and/ or damage to property of a third party, arising out of an accident involving the insured vehicle, will be paid for by the insurance provider.
Personal Accident Cover:
Most providers offer a Personal Accident cover worth up to Rs. 2,00,000 for commercial and private vehicles and for two wheelers the personal accident cover is up to Rs. 1 lac in the unfortunate event of accident, personal total disability or death of the driver/ owner.
Extent of Cover:
The extent of cover for third-parties is very comprehensive. Most companies offer a sum of up to Rs. 7.50 Lakhs to cover Third party property damage and Third parties injury. The policy holder can also restrict the amount of cover for damage to Third Party Property to Rs 6,000. This can help the policy holder to reduce the "Liability Only" premium.
GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017
FAQs on Liability Only Cover in Motor Insurance
- What does a liability-only policy for automobiles entail?
As it only covers losses to third parties, liability-only insurance is also referred to as third-party auto insurance. It offers financial security in the event that you harm another person's property or injure them in an accident, and it complies with the minimal coverage requirements set forth by Indian law.
- What does a car insurance period of liability cover mean?
Depending on the particular auto insurance coverage, the motor liability period's length varies. Typically, it lasts for a year, but the terms and conditions of the insurance may allow for a shorter or longer duration.
- What does liability insurance cover?
Liability insurance offers defence against lawsuits brought by victims of accidents and/or property damage. Liability insurance pays for any court fees and judgements that the insured party might be held accountable for.
- What is the liability policy for two-wheeler vehicles in India?
In India, two-wheeler owners are required to carry third-party bike insurance. In the event of an accident, this policy will cover any losses to a third party's property, life, or other losses. It does not, however, provide coverage for damage or loss to your own vehicle.
- What does 1 3 auto insurance entail?
The bundled motor policy provides third-party liability coverage for a longer period of time. Own damage (OD) coverage can be purchased for a one-year cost and then renewed annually.
- What is the meaning of Comprehensive Coverage?
After an event other than a collision with another vehicle, comprehensive coverage assists in the repair or replacement of your vehicle. such as burglary, fire, storm damage, or animal contact. If you own your vehicle outright, it's not required, but it is advised to assist cover expensive repairs because these scenarios can happen to any drive
- How much does liability insurance cost in India?
The applicable fee varies according to the risk group, indemnity limits chosen, ratio of limits, number of sites, and yearly revenue of your company. The insurance is subject to a mandatory excess of 0.25% of the AOA limit, with a maximum of Rs.1.5 lakh and a minimum of Rs.1,500.
- Are third party and motor vehicle liability the same?
This car insurance policy protects the policyholder from unintentional harm caused by the insured vehicle to third parties. It covers third-party liabilities such as third-party property losses, third-party fatalities, or third-party physical injuries resulting from an accident with the insured vehicle.
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