Claiming 3rd Party Insurance From Other Vehicle After Crash: Worth The Hassle?
Road accidents can happen at any time, and having the right vehicle insurance can be of great help. In many cases, vehicle owners consider relying on the third-party insurance of the other vehicle involved. While this may seem like a logical way to recover expenses, the process itself can be very complicated and time consuming. So, is it really worth the effort? Here’s a detailed look at how third-party insurance claims work and what you should expect when using them.
When your vehicle is damaged in an accident, due to someone else’s fault, you are left with two options- one, use your comprehensive car insurance to fund the repairs and move on. Two, make a third party claim on the other vehicle’s insurance policy and use it to pay for repairs.
The second option would sound more logical to most. Why should your car insurance pay for damages that someone else has caused? But, getting this implemented isn’t as easy as its sounds. Whether or not to take the second route depends on how much time, effort and risk you are willing to take.
So, why do people opt for third-party claims ? Let’s look at the advantages. The biggest gain is the protection of your No Claim Bonus. If someone causes damage to your car in an accident, you can either use your ‘Own Damage’ comprehensive insurance or use the ‘Third Party’ (TP) insurance of the vehicle that caused the damage.
If you use your ‘own damage’ insurance, it will affect your No Claim Bonus (NCB). In India, the NCB can resets to zero. The renewal premium will then become higher. If you make a third-party claim instead, the NCB will stay unaffected. Your renewal premium keeps coming down due to NCB.
The scope of a third-party compensation is also wider. Filed through the Motor Accident Claims Tribunal (MACT), it will cover all your expenses- from repair bill to medical expenses. In some cases, it can even pay for pain and suffering caused, in addition to compensating for loss of income. Yes, quite a luring deal.
Here’s another lesser known advantage. Insurance companies usually apply depreciation on parts unless you have opted for a zero-depreciation add-on. In a tribunal-based settlement, the compensation is calculated more broadly, and can often work in your favour.
Despite its benefits, many often avoid making third-party claims. The primary reason is that it is not a mere insurance claiming process, but a legal one. The settlement will not be quick. To make a third-party claim, one should file a case through MACT and start the legal procedures. In the case of Own Damage claims, you inform your insurer, a surveyor inspects the vehicle and repairs begin quickly. In the process, you will lose NCB and may even have to pay a small deductible.
Time is another concern. An Own Damage claim is usually settled within a week. A third-party claim, on the other hand, may take months or years. This means that you will have to use your own money to repair the vehicle and pay off any other bills, including medical bills, and wait for the refund to be released.
Another main reason for people staying away from third-party claims is that an FIR (First Information Report) is mandatory for initiating the procedure. This adds some complexity to the process, particularly in cases in which people prefer to not get police involved.
As the legal process progresses, the claimant will have to prove that the other driver was at fault. Proper proofs will be of key significance in doing this. Plus, the claimant will have to be very clean. If he/she is found to be even partially responsible for the crash, the compensation will be reduced under the principle of contributory negligence.
Property damage compensation under third-party insurance is capped at ₹7.5 lakh, according to the Insurance Regulatory and Development Authority of India norms. This can be a limitation when high-value vehicles are involved.
The decision to make a TP claim should be taken as early as possible. It is advised to avoid any delay in initiating the process. The process begins at the accident site. Collect complete details of the other vehicle- registration number, insurance policy details and the other driver’s license. Also collect proofs- photo and video evidences, and contact details of any possible witnesses.
An FIR is critical in making a TP claim. It must be filed at the police station that has jurisdiction over the accident site. Inform the insurance company of the at-fault party, then. A petition is then filed at the MACT through a lawyer. The court may then appoint a surveyor or rely on repair estimates to assess damage.
The case will then proceed through hearings and finally the insurer may be asked to issue a compensation. In some cases, the parties may also opt for out of court settlements to avoid long legal battles.
The short answer is no, if the damage is small. In such cases, using the ‘own damage’ policy is the better option. If your car has a zero-depreciation cover, the own damage policy will be more beneficial. Choose the TP claim if the accident has caused serious damage to the vehicle, injuries and major financial losses, and if you have enough time and bandwidth to fight the legal battle.