Kathmandu – With the increase in the number of vehicles on the roads and highways, the risk of accidents is also rising. According to annual statistics, the highest number of accidents occurs in the highway sector. In the event of a vehicle accident, not only the vehicle or its passengers are affected, but also third parties may suffer damage. In such cases, the vehicle owner is responsible for the financial loss caused to third parties. This responsibility is covered by third-party insurance, which transfers liability to the insurance company.

Third-party insurance is a type of insurance where the insurance company covers financial liability for damage caused to a third party while driving. It provides financial assistance in cases of property damage, personal injury, medical treatment, or death.

In the case of third-party injury or death resulting from an accident, the insurer will cover the expenses. The insurance company has set the sum insured for third-party insurance at 500,000 rupees. Therefore, third-party insurance is specifically designed to protect third parties. It compensates victims for financial losses resulting from property damage or health issues. However, this insurance does not provide coverage if the accident occurs while the driver is under the influence of alcohol.

Legal Terms of Third-Party Insurance:

Insuring a vehicle costs 1,700 rupees. With this amount, medical treatment for the driver is covered up to 300,000 rupees, and in case of death, up to 500,000 rupees. Medical treatment for passengers is also covered up to 300,000 rupees, with up to 500,000 rupees provided in case of death. Additionally, for property damage to third parties, liability compensation is provided up to 2,500,000 rupees. Investing 1,700 rupees in third-party insurance can reduce potential financial losses in the future.

Advantages of Third-Party Insurance:

• Secures the Future: Third-party insurance provides support for a more secure future. It offers some comfort to the insured against future risks. Since insurance companies also engage in reinsurance, there is no loss to the insured person in the event of the company’s bankruptcy.
• Reduces Potential Financial Losses: In the event of an accident, there is a risk of financial loss. Third-party insurance helps protect against these potential financial losses. Additionally, it offers some protection to the vehicle owner even after an accident.
• Company Bears Financial Liability: In the event of an accident, the company assumes the financial responsibility of third-party insurance, relieving the vehicle owner or driver from bearing the financial burden. The insurance company will cover up to 300,000 rupees for medical expenses for the injured party, as per the principle of compensation.
• Helps with Legal Formalities: Insurance is mandated by government rules, and third-party insurance is compulsory. It greatly assists in completing legal formalities after an accident and helps with post-accident costs.
• Insurance Coverage: Third-party insurance provides compensation for those injured or killed in an accident. It covers up to 300,000 rupees for medical expenses for an injured third party and up to 500,000 rupees in case of a third party’s death.