Buying a used car is a smart and budget-friendly choice, but even second-hand vehicles need proper protection on the road. That’s where third-party car insurance comes in. It’s the most basic type of used car insurance, and it’s also legally mandatory in India.
Whether your car is a few years old or recently purchased from a previous owner, having 3rd party car insurance ensures you’re covered against damages or injuries caused to others. It keeps you compliant with the law and protects your finances in case of an accident.
Understanding how 3rd party car insurance works for second-hand vehicles can help you avoid unnecessary costs and choose coverage that fits your needs. With trusted providers like TATA AIG offering easy online policies, getting insured is faster and more convenient than ever.
Is Third-Party Insurance Enough For A Used Car?
Whether third-party car insurance is enough for your used car depends on how you use and maintain it. If the car is parked safely, driven occasionally, and holds low resale value, a third-party policy might be all you need. It covers legal liabilities—like injury or damage caused to others—so you don’t have to bear those costs out of pocket.
However, it’s important to know that third-party insurance does not cover any damage to your own car. If your used vehicle is parked in public spaces, driven daily, or exposed to theft or weather risks, you may want to consider a comprehensive plan instead.
As per IRDAI’s 2025 guidelines, here are the fixed third-party premium rates based on engine size (applies to both new and used cars):
| Engine Capacity | Annual Premium (₹) |
| Up to 1,000cc | ₹2,094 |
| 1,000cc – 1,500cc | ₹3,416 |
| Above 1,500cc | ₹7,897 |
If your needs are basic and you’re primarily concerned with staying legally covered, third-party insurance may be sufficient. But if you’re looking for wider protection for your own vehicle, it’s worth considering an upgrade.
How Third-Party Insurance Works?
Let’s say your car accidentally hits another vehicle or damages someone’s property. In that case, your third-party insurance steps in to cover the cost of repairs or medical compensation for the other person. If the incident leads to legal trouble, it can also help with court-related expenses.
But here’s the catch: it only covers the other party. If your own car is damaged, you’ll have to handle the repair costs yourself. It also won’t help if your car is stolen, catches fire, or gets damaged by floods or other natural disasters.
That said, every third-party policy includes a Personal Accident Cover for the owner-driver, as required by IRDAI. This provides up to ₹15 lakh in financial support if the policyholder suffers death or permanent disability while driving the insured vehicle.
In short, third-party insurance helps you meet legal requirements and protects you from major third-party liabilities, but it won’t cover your own car’s damage.
Why 3rd Party Car Insurance Is A Good Fit For Used Cars?
Used cars often have a lower market value, which means paying for a full comprehensive policy may not always feel justified. In such cases, third-party car insurance is a practical choice—it keeps you legally protected at a much lower cost.
This type of used car insurance works well if your vehicle is older, not driven often, or mostly kept in a secure parking spot. It covers your financial liability if your car causes injury or damage to someone else or their property, which is essential under Indian motor laws.
Buying 3rd party car insurance online is simple. Just enter your car’s registration number, engine size, and owner details. Once the payment is done, the policy is issued instantly and delivered to your email. Renewals are just as quick and can be completed in a few clicks.
What You Should Keep In Mind
Third-party insurance keeps you compliant and protected from legal liabilities, but it comes with some limitations. It doesn’t cover any damage to your own car—whether due to an accident, theft, or natural calamities.
It also doesn’t cover your medical costs or those of your passengers in case of an accident. The only exception is the mandatory Personal Accident Cover for the owner-driver, which offers up to ₹15 lakh as per IRDAI rules.
Since older vehicles may also face mechanical wear and tear, you’ll need to handle those costs yourself. If your used car still holds decent value or you drive regularly in busy areas, it might be worth considering a comprehensive policy for better all-round protection.
How To Get The Best Price On Used Car Insurance?
Getting the best price on your used car insurance starts with understanding what you actually need. Used cars, especially those that are older or not driven frequently, usually don’t require heavy coverage. So, instead of opting for everything, it’s smarter to focus on the essentials. Look at your car’s age, usage, and current market value, then decide whether a third-party policy will do or if a comprehensive plan is worth the extra cost.
Once you’re clear on the type of cover, comparing quotes from different insurers can help you find the most cost-effective option. Insurers like TATA AIG make the entire process easy. You can get a quote in just two clicks, view available add-ons, and make your purchase online without paperwork. They also offer up to 75% discount on rollover policies for older cars, which is a huge plus if your vehicle is more than a few years old.
Pairing the right policy with a trusted insurer ensures you get solid protection without overpaying.
Conclusion
Third-party insurance can be a sensible pick for used cars, especially if the vehicle is older, rarely used, or has a lower market value. It keeps you legally protected at a minimal cost. However, if your car is regularly driven or still holds good value, it’s worth evaluating whether a comprehensive plan might offer better protection. Always match your insurance choice to how you use your car and what risks you’re comfortable handling.
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