What is a ‘Third party risk’ policy?
Third Party risk policy covers risks required under the Motor Vehicles Act. It is mandatory that every car owner be covered against Act Risks under Section 146 of Motor Vehicles Act 1988. The scope of cover is to pay compensation for death of or bodily injuries to third parties and damage to the property of third parties. While the Insured is treated as the first party and the Insurance Company second party, all others would be third parties. For private vehicles and cars, the ‘Act Only Policy’ covers third party property damages only upto Rs. 6000/-. Fire and theft risk can be covered by paying additional premium.
