When it comes to insuring your vehicle, understanding the different types of car insurance available is essential. One crucial type of car insurance is the third-party insurance, which is mandated by law in India.

Two mini toy car crash on a yellow background incident car traffic accident

This article will delve into the costs associated with third-party car insurance, helping you understand what you need to know to make an informed decision.

What is Third-party Car Insurance?

Third-party car insurance is a policy that covers damages to other people or property caused by your vehicle. It does not cover damages to your own car or injuries you might sustain. This type of insurance is crucial for protecting yourself financially from claims made by others in case of an accident.

How Are Third-Party Car Insurance Premium Rates Calculated?

The premium rates for third-party car insurance in India are determined by the Insurance Regulatory and Development Authority of India (IRDAI). These rates are calculated based on several key factors:

  • Vehicle’s Cubic Capacity (CC): The engine capacity of your vehicle significantly influences the premium amount. Generally, vehicles with a higher cubic capacity will incur higher premiums.
  • Vehicle Age: Older vehicles typically have lower premiums compared to newer models, primarily due to depreciation in the vehicle’s value over time.
  • Vehicle Type: Different types of vehicles, such as two-wheelers, private cars, and commercial vehicles, attract different premium rates. Commercial vehicles usually have higher premiums.
  • Geographical Location: The registration location of the vehicle impacts the premium. Areas are categorized based on risk levels, with metropolitan cities often having higher premiums due to increased traffic density and accident risks.

Understanding these factors is crucial as they affect the premium you will pay for your third-party car insurance. Being aware of these elements can help you make informed decisions when purchasing or renewing a policy.

Third-Party Car Insurance Rates for Petrol, Diesel, and Hybrid Cars

Engine CC of the CarPremium (1-year policy)
<= 1,000 ccRs. 2,094
>1,000 cc to <= 1,500 ccRs. 3,416
>1,500 ccRs. 7,897

Third-Party Car Insurance Rates for Electric Cars

Battery CapacityPremium (1-year policy)
<= 30 kWRs. 1,780
>30 kW to <= 65 kWRs. 2,904
>65 kWRs. 6,712

Third-Party Car Insurance Rates for Petrol and Diesel Bikes

Engine CC of the BikePremium (1-year policy)
<= 75 ccRs. 538
>75 cc to <= 150 ccRs. 714
>150 cc to <= 350 ccRs. 1,366
>350 ccRs. 2,804

Third-Party Car Insurance Rates for Electric Bikes

Bike Battery CapacityPremium (1-year policy)
<= 3 kWRs. 457
>3 kW to <= 7 kWRs. 607
>7 kW to <= 16 kWRs. 1,161
>16 kWRs. 2,383

These tables illustrate the premium rates for various vehicle types based on their engine or battery capacity. This structured approach helps in understanding the cost implications for third-party car insurance across different vehicle categories.

Benefits of Third-party Car Insurance

  • Legal Requirement: Having third-party insurance is mandatory. Driving without it can lead to hefty fines and legal consequences.
  • Financial Protection: It protects you from financial liability in case you cause damage to someone else’s property or injure another person in an accident.
  • Affordable: Compared to comprehensive insurance, third-party insurance is generally more affordable, making it accessible to a wider range of drivers.

Limitations of Third-party Car Insurance

  • No Coverage for Own Vehicle: It does not cover damages to your own car or theft.
  • Limited Scope: Only covers third-party liabilities, which means personal injuries and damages to your car are not covered.
  • No Add-ons: Unlike comprehensive policies, third-party insurance typically does not offer add-ons like roadside assistance or zero depreciation cover.

Tips to Reduce Car Insurance Costs

  1. Compare Policies: Shop around and compare different insurers to find the best rates.
  1. Opt for Higher Voluntary Deductibles: Agreeing to pay a higher amount out-of-pocket in case of a claim can lower your premium.
  1. Maintain a Clean Driving Record: Avoiding accidents and traffic violations can help keep your premiums low.
  1. Utilize No-claim Bonus: Accumulate no-claim bonuses to reduce your premium over time.


Understanding the cost and benefits of third-party car insurance is essential for every car owner. While it may not provide comprehensive coverage, it fulfills legal requirements and offers financial protection against third-party liabilities. By considering factors such as vehicle type, driver profile, and geographical location, and by employing strategies to reduce costs, you can find a third-party car insurance policy that meets your needs without breaking the bank. Always remember to compare policies and read the fine print to ensure you get the best possible deal.

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