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    UNDERSTANDING THIRD PARTY

    The phrase ‘Third Party’ is quite well known and one which most people are familiar with. But do you know what it actually means? Perhaps a small segment of policyholders does.

    Interestingly this phrase is used only once in the Motor Insurance Policy wording! But guess what? The motor insurance policy wording does NOT define the term Third-Party.

    We could explain the term to you with the example of an incident. One which will surely test your understanding of Third Party.

    Anil and Karim went out to attend a marriage function one evening in Anil’s car. On their way back, Karim drove Anil’s car. Karim accidentally crashes into with his own car when he tried parking Anil’s car next to his.

    Both cars are insured for motor Third-Party with different insurers.

    Now answer the following:

    1. Damage to Karim’s car is covered by: The third-party motor policy of Karim or the third-party motor policy of Anil?

    2. Damage to Anil’s car is covered by: The third-party motor policy of Karim or the third-party motor policy of Anil?

    Finally, what will be your decision if both Anil and Karim’s cars are insured for 3rd party with the same insurer?

    We shall be glad to hear from you!

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