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Home / Car Insurance / Third-Party Car Insurance – Benefits, Buy/Renew Online
What is Third Party Insurance?
Third-party car insurance is the minimum coverage that a person or vehicle owner in India must maintain under the Motor Vehicles Act, 1988, as required by law. All insurance policies have three parts: you are considered the "first party", the insurers, insurance companies, are "the second party", and if a third party (any person injured by your vehicle or the person whose property was damaged), the policy will pay for the injured party's costs.
A policyholder does not get any payment for the loss of their own car. The insurance amount is not decided by the insurer. It is a fixed amount set by the IRDAI, which varies with the car's engine cc and is the same across all companies. Driving a vehicle without it will result in a very high penalty or even imprisonment.
Key Features of Third Party Car Insurance
Here’s a list of the top features of a Third Party Car Insurance Policy.
Low Premium
A third party insurance for cars is available at a low price. It is available at a nominal price as compared to the Comprehensive Car Insurance Policy.
Liability Cover
A third-party liability policy will cover you against personal injuries to a third party and property damages to a third party up to Rs. 7.5 lakhs.
Compulsory Personal Accident Cover - Owner Cum Driver
PA cover is mandatory by law. Hence, it is recommended to buy this cover along with a Third-party Liability Plan. It offers insurance coverage up to Rs. 15 lakhs for the owner/driver in case of death/permanent disability while driving.
Easy Purchase Process
The process of purchasing third party insurance for cars is simple. As it is a standard policy, there is not much to choose from. You simply have to select your car’s model and purchase the policy.
Why Do You Need Third Party Insurance?
You should purchase a Third Party Car Insurance Policy for your vehicle, as it is mandatory as per the rules and regulations of The Motor Vehicles Act 1988. Driving your car without a Third-party Liability Policy is illegal. You can be penalised by the authorities for doing so. A third party insurance policy saves you from legal liabilities and financial losses due to damage to third-party property and injury or death of a third party. Hence, it is crucial to buy a third party car insurance plan.
Third Party Insurance Premium Rates (2026)
The third-party insurance premium is determined by the Insurance Regulatory and Development Authority of India (IRDAI) based on the car's engine cubic capacity (cc). The premium rates set by IRDAI are subject to changes. Here’s a table showcasing third-party car insurance premium rates.
THE CAPACITY OF THE VEHICLE’S ENGINE | PREMIUM RATE |
|---|---|
Not exceeding 1,000 cc | Rs. 2,094 |
Exceeding 1,000 cc but not exceeding 1,500 cc | Rs. 3,416 |
Exceeding 1,500 cc | Rs. 7,897 |
Third-Party Insurance Premium Price List for Electric Cars
VEHICLE BATTERY CAPACITY | PREMIUM (1-YEAR POLICY) |
|---|---|
Less than 30 kW | Rs. 1,780 |
More than 30 kW and less than 65 kW | Rs. 2,904 |
More than 65 kW | Rs. 6,712 |
Third-party premiums set by the IRDAI are uniform and remain fixed for all insurers within a given engine size or slab. So, no insurer offers a third-party cover at a lower rate than what the regulatory body has stipulated. However, the own damage premium, the comprehensive add-ons, and your Claim Bonus will vary considerably from one insurer to another.
What’s covered?
What’s not covered?
What’s Covered in a Third Party Insurance Policy?
Here’s a list of all that’s covered in a basic 3rd party car insurance policy.
Third-party injuries: There might be an instance where your car accidentally injures a third party. For example, your car might accidentally go out of control for a moment and injure a pedestrian walking on the footpath, the third-party policy will cover the cost of treating such injuries.
Third-party death: In an unfortunate event, you might accidentally injure a person with your car leading to the person’s death. The car third party insurance policy will take care of reimbursing the deceased person’s family members as per the terms and conditions.
Third-party property: Damage to a third person’s property is also covered under a third-party policy. For example, your car might go out of control and crash into someone’s shop along the road. This policy insures you against the expenses arising out of such instances up to Rs. 7.5 lakhs.
Third-party vehicle: This cover is a part of the third-party property point but is mentioned separately as it is a common occurrence. For instance, your car might run into a third party’s bike on the road. The policy will cover damages to the bike as per the terms and conditions.
What’s Not Covered in a Third Party Insurance Policy?
Here’s a list of things that are not covered under the Third-party Policy.
Damage to your car: A Third Party Car Insurance Policy does not offer the ‘Own Damage’ cover. Own Damage Insurance (OD Insurance) cover insures you against damage to your car in case of an accident, fire, man-made calamities, natural calamities and theft.
Personal Accident (PA) cover: Personal Accident cover is mandatory by law. A Third-party policy does not cover you in case of permanent disabilities/death arising from a car accident.
Driving under the influence: A Third-party Liability Policy does not cover third-party liabilities if you are driving the car under the influence of alcohol or other intoxicating substances.
Driving without a valid Driving Licence: The policy does not offer coverage if you drive the car with an expired or invalid Driving Licence.
Outside geographical limit: The policy does not cover third-party damages or injuries/death that occur outside the geographical boundaries as mentioned in the policy wordings.
Unauthorised usage of vehicle: The 3rd party car insurance policy does not cover third-party liabilities caused due to activities such as illegal racing or illegal commercial activities.
An unauthorised person driving the vehicle: The Third-party Insurance Plan will not offer coverage for third-party liabilities when the car is driven by a person other than the owner or the designated driver.
Comprehensive vs Third Party Car Insurance
The third-party vehicle insurance plan protects against the following: death and injury to third parties (no limits, court-decided), property damage to third parties (up to ₹7.5 lakh), and personal accident of the owner-driver (up to ₹15 lakh). The third-party insurance plan provides no cover for damage to one’s own vehicle due to accident, theft, or fire. A comprehensive plan provides more coverage than a third-party plan since it adds own-damage cover to all third-party covers.
The following table provides more details regarding the comparison of third-party and comprehensive car insurance plans.
DESCRIPTION | THIRD-PARTY CAR INSURANCE | COMPREHENSIVE CAR INSURANCE |
|---|---|---|
Physical injury and accidental demise caused to the third party by the insured car. | ✔️ | ✔️ |
Coverage for damages to third party property. | ✔️ | ✔️ |
Own damage coverage | ❌ | Provides coverage in case of damages to your car due to accidents, man-made/natural calamities, theft, fire or total loss. |
Premium | Low | High, as it provides wide-ranging benefits. |
No Claim Bonus | ❌ | ✔️ |
Add-ons | ❌ | ✔️ |
For detailed analysis, visit our detailed guide on comprehensive vs third party car insurance
Factors That Affect Third Party Car Insurance Premium
Third-party insurance rates are decided by the industry regulator (IRDAI) based on the Cubic Capacity (cc) of the car’s engine. Hence, the vehicle’s engine capacity is the only factor that affects the third-party premium rates.
Benefits of Third Party Car Insurance
Here are the key benefits of the Third Party Car Insurance Policy.
Liability Cover
The policy offers a liability cover against injury/death of a third party and damages to third party property. In a way, it is a financial cover for you when it comes to paying third parties.
Legal Compliance
Buying a Third party car insurance policy makes you compliant with the law of the land. An active policy will save you from paying penalties. By buying this plan and renewing it before its expiry, you stay away from being imprisoned for legal violations.
Low Premium
The Third party Car Insurance price is more affordable compared to a Comprehensive plan. The third-party policy is a cost-effective plan that provides basic coverage.
Convenience
A Third Party Car Insurance Policy is a simple plan. It does not have complex features like a Comprehensive policy. If you plan to buy it online, you can do it conveniently through your smartphone within minutes.
How to Buy/Renew Third Party Insurance Online from ACKO
Here are the steps to buy or renew a third party car insurance online from ACKO.
Step 1: Scroll to the top of this page or download the ACKO app on your smartphone.
Step 2: Enter your car’s registration number and hit the “Check Prices” button.
Step 3: Verify your vehicle details and provide details about your previous policy, if available.
Step 4: Enter your mobile number and address pincode and click on “View Plans”.
Step 5: Select the Third-party plan and complete the online payment to buy or renew the third-party car policy.
Note: Existing ACKO customers can log in to your account and renew the policy by clicking on your policy card.
How To Raise a Claim for Third Party Insurance
Claim settlement in a third party insurance policy is a complex process. It is not as simple as it is in a Comprehensive policy. You cannot simply call your insurance company to take care of the matter. There’s a legal process involved. The steps to raise a claim might be different on a claim-to-claim basis. Here’s a broad overview of the steps that are involved in settling a third party insurance claim.
Step 1:
Informing the insurance company (ACKO in this case) and filing the First Information Report (FIR) with the police. Normally, the third party files the FIR.
Step 2:
Registration and hearing of the case in the Motor Accident Claims Tribunal. The Tribunal will go through all the collected evidence and the testimonials.
Step 3:
Result of the case in the Motor Vehicle Tribunal. The hearing and the declaration of the result can take time. It will be followed by the settlement of the claim amount by ACKO.
Documents Required for Third Party Insurance
Third-party motor insurance claims are not resolved through the regular cashless garage procedure but are handled by the Motor Accident Claims Tribunal (MACT) and are processed legally. If you keep the following documents, you will have a very smooth, third-party insurance claim filing process.
Copy of the Third Party Car Insurance Policy
Duly filled and signed claim form
Copy of FIR (if applicable)
Vehicle Registration Certificate (RC)
Valid Driving Licence of the driver
Aadhaar Card/PAN Card or other ID proof
Accident photographs (if available)
Medical reports or bills in case of bodily injuries
Repair bills/estimate for third-party property damage
Court summons or legal notice (if received)
Any other documents requested by ACKO during claim processing
MACT Process Steps
FIR: One must report the accident immediately at the police station (nearest police station) handling the area where the accident took place.
Evidence collection: Getting witness details and photographing or taking pictures of the accident spot
Sending a claim application: You apply for your insurance claim to the MACT court.
Tribunal Decision: The tribunal will evaluate losses and finalise the compensation amount.
Why Choose ACKO for Online Third Party Car Insurance?
Buy Online
Buying Third-party Car Insurance online is hassle-free and easy. At ACKO, you just need to provide a few details of your car on our official website or mobile app and make the payment to insure your vehicle within a few minutes.
24x7 Accessibility
You can access our official website and mobile app 24x7. Whether you are at your home, work, or even travelling, access our online platform any time of the day to buy, renew or raise claims.
No Paperwork
There is no paperwork involved in buying/renewing Third-party Car Insurance online from ACKO. Simply provide a few details of your car and insure it with the Third-party Liability Plan instantly.
Frequently Asked Questions about Third Party Insurance
Third Party Insurance FAQs
FAQs
What happens to my Third party insurance policy if I sell my car?
If you are selling your car, you have two options for your Third party insurance policy. You can either cancel it or transfer it to the new owner. In both cases, you will have to submit the required documents.
Which third party insurance is best for a car?
There’s only one type of third party insurance available for cars, and the premium rates are identical, no matter which insurance provider you choose. However, opting for an online insurance provider like ACKO is beneficial as it offers you the convenience of online purchase and renewal.
What is 1st, 2nd and 3rd party insurance?
The first party will be you, the car's owner and the policy's buyer. The second party is the insurance company through which you purchase the policy. The third party is anyone else whose property or persons are injured as a result of your car causing damage to them in an accident.
What is an example of a third-party claim?
In case you accidentally knock down the other car at the signal, causing injuries to its occupant. The cost incurred for repairing the car and claims for injury/death made by the other party fall under third-party claims, and the policy settles them, including property damage up to ₹7.5 lakh; the rest is settled by MACT.
What are the disadvantages of third-party insurance?
It will compensate for any damage caused to others. It does not insure your vehicle for any accidents, loss or damage through theft, fire, or natural disasters; it restricts third party liability coverage to a limit of ₹7.5 lakh; and no additional coverages such as zero depreciation, engine protector, and others can be added to the policy.
Is third-party insurance for 3 years? What is a 3-year (and 5-year) policy?
If the vehicle is a new one, then long-term third-party insurance cover is a must at the point of purchase itself, which is 3 years for cars and 5 years for two wheelers as per the direction of IRDAI, following the Supreme Court directive. The third-party premium is paid in full before starting in such a way that the legal cover doesn't lapse during the period.
Is GST applicable on third-party car insurance?
Yes. Motor third-party insurance continues a 18% GST even in 2026. However, the GST exemption that came into effect from 22 September 2025 covered individual health and life insurance but not motor insurance. Therefore, your premium amount will be the base rate as fixed by IRDAI plus 18% GST (e.g., ₹2,094 + 18% ≈ ₹2,471 for a small car).
Can I have two third-party insurance policies for one car?
No. Only one third-party insurance policy should be active on one particular vehicle at any given point in time. Getting an additional policy won't protect you anymore, and you can't make claims under two policies simultaneously; insurance companies won't accept duplicate insurance coverage.
Does third-party insurance cover theft or damage to my own car?
No. Third-party insurance only covers the damage/injury/loss caused by your vehicle to a third party.A stolen car or damaging your car in an accident, fire, natural disaster etc. are not covered under any insurance.
What documents are required for a third-party claim?
Third-party claims are resolved by the Motor Accident Claims Tribunal (MACT) and not via the insurer's cashless process. You would require: a copy of the insurance policy, driver's license, the vehicle's Registration Certificate (RC), FIR or police report, traffic challan (if any), along with photos or details of the incident.
Which is better, third party or comprehensive?
A comprehensive car insurance plan is better than a third-party policy as it provides own damage and third-party coverage.
What is the validity of third party car insurance?
Generally, a third-party policy is valid for one year. However, while insuring a new car, buying a three-year third-party policy is compulsory as per law.
What is the cost of 3rd party insurance for a car?
The third party car insurance price depends on the car’s engine capacity. IRDAI decides the third party car insurance premiums based on the vehicle’s engine capacity.
Why is it mandatory to purchase Third-party car insurance in India?
It is mandatory to purchase Third-party car insurance in India as it is demanded by The Motor Vehicles Act, 1988. Not abiding by this rule can lead to heavy monetary penalties.
What happens if I am caught driving my car without a valid Third-party car insurance policy?
Driving without a Third-party car insurance policy is a legal offence. Therefore, you will be penalised for it. The penalty includes a monetary fine and can even lead to imprisonment. Also, you cannot raise any claim in case of third party injuries or damages if you don’t have a valid Third party insurance policy.
Is it possible to purchase a Roadside Assistance add-on with a Third-party car insurance policy?
No, you cannot purchase a Roadside Assistance add-on with a Third-party car insurance policy. You cannot purchase any add-ons with a Third-party policy. You can purchase add-ons only with a Comprehensive policy.
Does the model of my car matter while buying a Third-party policy?
The premium for a Third-party Car Insurance Policy based on the vehicle engine’s cubic capacity is regulated by IRDAI. As different car model engines might have different cubic capacities, the premium for them might be different.
Need More Help?
Have queries related to ACKO’s two wheeler insurance policy? Refer to our Policy Wordings for detailed information or reach out to us via email or phone using the information below
Email
Write to us at [email protected]
Phone
Please visit our support centre at https://www.acko.com/contact-us/ for any assistance
Written by
Nikhila PS
Senior Content Editor
Nikhila is a content creator with 6+ years in EdTech and motor insurance, turning complex policies into clear, engaging content. She enjoys exploring digital trends, social media, and art while planning her next short escape.
Reviewed by
Rekhit Singh Kaushal
Senior Director - Motor Underwriting
Rekhit Singh Kaushal is Senior Director at ACKO, a leading digital motor insurance provider in India. With deep expertise in insurance strategy and innovation, he brings trusted insights on car and bike insurance to help drivers stay protected.
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