What Are OD and TP In Insurance?
OD and TP: Own Damage and Third-Party Liability are phrases you may have encountered while searching for an auto insurance policy. These are the most fundamental insurance offered by your insurer. After selecting a plan, you can proceed to policy details like length and riders. However, it is essential first to determine what fits you.
Meaning and benefits of own damage insurance
Own damage auto insurance protects you (the vehicle's owner) against various monetary losses. Here's an illustration:
Assume Rakhi is an inexperienced driver who just acquired her license and wishes to practice driving her father's vehicle. She loses control of the steering wheel on a small lane bordered by trees and crashes into one.
There is smoke rising from the car's hood, and the front of the vehicle has a V-shaped dent. Note that no third parties were affected by this accident. It is the insured automobile that has been damaged. Rakhi is safe and sound since the airbags deployed just in time to save her.
After a thorough inspection, the insurer will determine the claim amount and pay for the repairs by the policy terms.
Benefits of Own Damage Car Insurance
Here is a list of advantages.
- Coverage for accident-related car damage.
- Theft mask
- Protection for natural or artificial disasters
- Fire damage
- Option to modify the plan with extras
What is Third-Party Insurance?
By the Motor Vehicle Act, all vehicle owners must carry third-party insurance, generally known as "act-only" insurance. The insurer protects against damage to the third vehicle, party's goods, and bodily harm. The policy does not protect the insurer.
What is the function of Third-Party Insurance?
If a policyholder is involved in an accident, the insurer provides financial help to cover the cost of third-party property repairs. Thus, it decreases the policyholder's cost burden. In an accident, the insured must immediately notify the insurance company before submitting a claim.
When a claim is lodged, the insurance appoints a surveyor to inspect the damages and confirm the anticipated repair costs. Once the verification is complete, the insurance will pay out the claim.
Importance of Third-Party Insurance
- Third-party liability insurance is a legal necessity. Therefore, obtaining third-party coverage enables the policyholder to comply with the law.
- Although it is a basic coverage choice, it provides policyholders with the comfort of mind that they have adequate financial protection against any accident-related damages they may cause to others.
- Third-party auto insurance protects the policyholder's finances from unforeseen risks.
Noting the terminology is the initial step in comprehending how a third-party insurance policy operates. The following are frequent terms connected with third-party coverage:
- First party: The policyholder or purchaser of the insurance policy.
- The insurer or insurance business is the second party.
- Claimant or anyone who asserts a claim for damages caused by the second party.
If the policyholder is involved in an accident with a third party, they are responsible for paying any damages or injuries. When an accident occurs, the policyholder must immediately notify the insurance provider and advise them of the situation.
In addition, the following facts about the accident must be submitted to the insurer:
- Date and time, along with a description of the incident.
- Details regarding the insurance coverage and policyholders present during the accident.
- Describe the injuries received by the driver, any passengers, and any damaged property or vehicle.
- Details regarding the witnesses.
- Conditions of the weather and visibility at the time of the accident
- Photographs of evidence were gathered at the scene of the accident.
If the police inquire, provide insurance company information and record the First Information Report (FIR) number, if relevant.
In addition, if the accident was not the policyholder's fault, the claimant may file a claim for the cost of renting a car, repairs, and injury compensation, as specified in the insurance policy document.
Features of Third Party Insurance
- Third-party insurance provides all policyholders with a minimum degree of protection.
- It is also known as a liability-only policy or an act-only coverage.
- It provides coverage against the policyholder's potential legal liability to a third party in the event of an accident. It compensates the third party for bodily injury, death, and property damage.
- An important characteristic of this sort of coverage is its reasonable premium.
- Third-party insurance does not provide coverage for the insured vehicle.
The procedure for Third Party Insurance Claims
- The policyholder must abide by the claim rules to get compensation from the insurance company. The stages involved in submitting a claim for third-party insurance are as follows:
- First and foremost, the policyholder must report the accident to the insurance company within the timeframe specified in the policy paperwork.
- The policyholder should file a First Information Report (FIR) and obtain a copy at the police station closest to the accident scene.
- Filing a claim with the lender entails completing the form and providing the required documentation.
- Following the submission of the claim, the insurance will dispatch a surveyor to evaluate the damage and confirm the estimated cost. Following evaluation, the surveyor submits a report.
- Based on the report, the insurance pays the claim.
Own Damage and Third-party Car Insurance, which is a better policy?
Before the long-term auto insurance rule (new cars must have a 3-year, Third-party long-term policy), anyone seeking extensive coverage would choose an annual Comprehensive Car Policy.
There was no mistake between Third-Party and Own-Damage coverage, as both offered broad coverage for the same term.
Now that Third-party long-term insurance is required for new cars for three years, we must choose which coverage type is best for you. Therefore, let's begin by dissecting these plans and understanding the various coverages they offer.
There are lot of insurance companies in the market offering various insurance policies at different rates. you must compare before buying an insurance policy. search on finndit.com and get the details of insurance policy providers near you.
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