Third Party Insurance Claims — Process and Legal Help for Accident Victims

What is Third Party Insurance?

Third party insurance is a mandatory motor insurance policy that covers the insured's liability for death, injury, or property damage caused to a third party by the insured vehicle. Under the Motor Vehicles Act, 1988, no vehicle can be driven on public roads without at least third party insurance.

The policy covers the insured's legal liability to third parties arising from the use of the vehicle. The insurance company is liable to pay compensation awarded by the MACT to the third party up to the policy limits.

At Advocate in Asansol, we help third party claimants file and pursue their claims against insurance companies. Our lawyers ensure that you receive the full compensation you are entitled to.

Scope of Third Party Coverage

Death or bodily injury to a third party: The policy covers all sums the insured becomes legally liable to pay for death or injury to a third party arising from the use of the vehicle. There is no upper limit for liability for death or injury.

Property damage to a third party: Covers damage to third party property up to Rs. 7.5 lakhs (standard limit). Higher limits are available with additional premium.

The policy also covers the cost of legal defense if the insured is sued for third party claims. The insurer appoints a lawyer to defend the case.

Third Party Claim Process

Step 1: Report the accident to the police (FIR). Obtain medical treatment for injuries. Inform the insurance company about the accident.

Step 2: File a claim petition before the MACT with details of the accident, injuries, medical expenses, and loss of income. The MACT issues notice to the owner, driver, and insurance company.

Step 3: The insurance company may file a written statement contesting the claim. Evidence is recorded. The MACT passes an award determining the compensation payable.

Step 4: The insurance company deposits the award amount with the MACT, which releases the amount to the claimant.

Compensation Heads in Third Party Claims

Medical Expenses: All expenses incurred for treatment, hospitalization, surgery, medicines, and rehabilitation.

Loss of Income: Loss of actual income during the treatment and recovery period. For permanent disability, loss of future earning capacity.

Pain and Suffering: Compensation for physical pain, mental agony, and loss of enjoyment of life.

Loss of Amenities: Compensation for the inability to enjoy life's normal activities and pleasures.

Future Medical Expenses: Estimated expenses for future treatment, surgeries, or rehabilitation.

Disability: For permanent disability, compensation based on the percentage of disability and its impact on earning capacity.

Documents Required for Third Party Claims

FIR copy, driving license of the driver, RC of the vehicle, insurance policy copy, medical records (discharge summary, bills, prescriptions, disability certificate), income proof (salary slips, IT returns, bank statements), proof of age, photographs of the accident scene, and a copy of the claim petition.

Settlement vs Litigation

Many third party claims are settled through negotiation between the claimant and the insurance company. The MACT may also encourage settlement. However, if the insurance company offers a low settlement, it may be better to pursue litigation.

The advantage of litigation is that the MACT determines fair compensation based on established legal principles. The disadvantage is that litigation takes longer (6-12 months or more). Our lawyers advise on whether to accept a settlement offer or pursue litigation.

Disputes and Appeals

If the claimant is aggrieved by the MACT award, they can appeal to the High Court within 90 days. The insurance company can also appeal on limited grounds. The appeal may result in enhancement or reduction of compensation.

Common disputes include contributing negligence (where the claimant is partly responsible for the accident), disputed disability percentage, and questionable income proof. Our lawyers handle appeals at all levels.

Frequently Asked Questions

What is the difference between third party and comprehensive insurance?▼

Third party covers only liability to others. Comprehensive covers own vehicle damage plus third party liability.

Is third party insurance mandatory?▼

Yes, under the Motor Vehicles Act, no vehicle can be driven without at least third party insurance.

What is the time limit for filing a third party claim?▼

6 months from the date of accident for filing before MACT. The Tribunal can extend this period.

Can I claim if the accident was my fault?▼

Yes, third party claims are based on the insured's liability. Even if you were at fault, the insurer pays the third party.

What is the limit for property damage under third party?▼

Standard limit is Rs. 7.5 lakhs. Higher limits available with additional premium.

Can the insurance company settle the claim directly?▼

Yes, the insurer can settle the claim with the claimant through negotiation or by depositing the MACT award amount.

What happens if the insurance policy is fake?▼

The MACT can still direct the insurer to pay the award and recover from the owner for using a fake policy.

How can a lawyer help with third party claims?▼

File the claim, gather evidence, calculate compensation, negotiate settlement, represent at hearings, and handle appeals.