Quote:
Originally Posted by deepblue  what is the disadvantage of third party insurance. One of my friend is buying a second hand Ascent ( GLE ) model, June 2006 model. Owner ( a business man) says it has done only 12,000 km. But it has a third party insurance. The expected price is around INR 4 lakh. what is the take of all learned ones here |
A 3rd party insurance is a bare-bones insurance policy that is mandated under law. While various other flavors of the policy cover is the owner's prerogative the 3rd party he must get. This is the policy that covers any person (3rd party) who gets injured by your vehicle. So if you cause an accident and the person sues you your 3rd policy is there to cover the costs.
Coming back to the Accent in question, what it means is that the businessman in question has spent the minimal amount on the car's insurance. Most possibly because he knew that he was going to sell the car soon and hence decided not to spend on the insurance beyond what was mandated under law.
For your friend this translates into some not so happy news. If the car suffers an accident or is lost in some natural disaster or gets stolen etc. he will have to pay for it from his own pocket. Remember, insurance is costly and any upgrade will mean that much additional will have to be paid from his pocket.
Also, why is the owner selling off a car that is barely a year old? On top of that the insurance is not comprehensive. I think it will be wise if you could ask for his 1st year's insurance policy. Check whether he has changed his insurer as well. If so it could mean trouble. Find out from the previous insurance company whether there was any claim/claims in the 1st year. The amount of claim if any will give you a good idea on whether the car got into some serious accident and then repaired back into shape.