We have so far had a broad look at the options of making a third-party claim for a vehicle accident. Now, what if you hold a motor-third party liability (TP) insurance policy and a claim is made against you?
It pre-supposes your vehicle has been in an accident and somebody is injured, or their vehicle or any other property has been damaged in the incident.
Ahead of any consideration, you should ensure that any injured person gets immediate medical attention. However, do not offer any monetary help or promise be it injury, death or damage. This could amount to your admitting liability and may compromise your insurance company’s ability to handle the case. This is, in fact, an express condition in your TP insurance policy.
Inform the police and share personal contact information of both parties, the vehicle registration details and other information. Call your insurance company and they will take you through the next step and formalities for the likely TP claim against you.
You may want to file an ‘own damage’ claim as well.
If it is only an injury or a vehicle damage, there would be ‘helpful’ suggestions to settle it between yourselves, from bystanders or friends and family. My advice is please choose the formal path. The injured party will lodge a complaint, a first information report (FIR) will be registered by the police and all the procedures outlined in these columns earlier may be witnessed. Your presence would be required at the police station depending on the nature and extent of the injuries.
Once your insurance company is in the picture, you can heave a sigh of relief. Now that is the true value of TP insurance. Do their documentation and let them take over the case at the Motor Accident Claims Tribunal (MACT) and proceed with negotiated settlements where permitted. You don’t have to look for a lawyer, pay the lawyer fees or appear in court. In fact, insurance companies are careful and will not even let the litigant’s lawyer as much as get in touch with you. If somebody does so, ensure you inform your insurer in writing with all the details.
In the case of third-party injury or death, the liability of the insurance company is unlimited. This means that the entire award of the MACT or the negotiated settlement ratified by the court would be paid by your insurer. In the case of third-party property damage, the limit of the policy’s liability is ₹7.5 lakh. If the court awards anything more than that, you have to pay out of your pocket.
As with anything dealing with insurance, caveats apply. Your TP insurance should be valid. Your driving licence, or that of the person who drove the vehicle when the accident took place, should be valid.
The person driving should not have been under the influence of alcohol or drugs, and the vehicle should not have been in use for any unlawful purpose. Neither should it be in use for any purpose other than what it has been intended for, which will be part of your insurance terms. For instance, using a private car as a commercial vehicle.
In these cases, the TP policy will not be liable, but the buck would stop with the vehicle owner.
(The writer is a business journalist specialising in insurance & corporate history)