How to Claim Compensation under Third Party Insurance

Third party insurance means a third party liability cover. As the name suggests, the beneficiary of the policy is someone other than the two parties involved in the contract i.e. the owner(insured) and the insurance company. Therefore, the third party is the one who suffers damages due to an accident. Section 146 of the Motor Vehicle Act, 1988, mandates for all car owners to have a third-party car insurance policy.

This insurance does not provide any benefit to the insured. However, it covers the insured’s legal liability for death/disability of third-party loss or damage to the third-party property. This policy does not cover the damages suffered by the policyholder or their vehicle. It only pays for the damages to the third party and the claim must be filed by the third party.

Steps to claim

As soon as one meets an accident, the primary step towards claiming a third party insurance is registering the FIR, stating all the sequence of details in the nearby police station and collect charge sheet.

For motor accident claims there is a special court known as Motor Accidents Claim Tribunal, where the crime needs to be registered. One can register the claim for injury, death or property damage with the tribunal in the jurisdiction of area where either party resides.

Documents required while filing for the claim includes duly signed claim form, police FIR copy, driving license copy, policy copy, RC copy of the vehicle, etc.

There is no limit for claiming on liability for injury or death but the cover for property damage under third party is up to Rs. 7.5 lakh only. In the case of property damage the inspection officer’s report and the original bill to estimate the total loss is mandatory.

In case of injury or death, one can file a claim for hospitalization expenses, permanent total or partial disability and loss of income i.e. if the person is unable to earn due to bodily injury. The turnover time for third-party claims for injury or death is three years.

The important part is to prove the other party’s mistake in court. The claimant has to establish other party’s negligence to avail compensation. Only after you establish the fault of the other party involved in the accident, can claim for the damages be filed.

The court hears both the parties and analyses proofs before fixing the liabilities. The insurance company is responsible to pay for the damages for such injury or damage, if it is covered and vehicle is not at fault. Insurance companies are entitled to drop a claim if the vehicle was used for hire or reward (when on date of accident it did not had permit for hire and reward), for organized racing and speed testing, where a vehicle is a transport vehicle and did not had permit to transport the goods on date of accident

Right to appeal: As per section 173 of MV Act, 1988 any person aggrieved by an award of a claims Tribunal may, within ninety days from the date of the award, prefer an appeal to the High Court. Provided further that the High Court may entertain the appeal after the expiry of the said period of ninety days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time.

Out-of-court settlements are also permitted by the law.

References:

The Motor Vehicle Act, 1988

https://www.policybazaar.com/

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