What Is Compulsory Third Party Insurance?
What Is Compulsory Third Party Insurance?: Once you enter practical life and start working, you are bombarded with responsibilities. From filling out forms on your own to managing your own place, it can be a lot. Not to mention the many insurance policies that you need to invest in for your future.
Out of all the insurance policies, one of the most underrated and important insurance is Compulsory Third Party Insurance, commonly known as CTP.
What is CTP Insurance?
If you are a motor vehicle owner, it is compulsory that you invest in CTP insurance. It is a type of insurance that covers people, including passer-by, pedestrians or passengers, injured in a car accident as a result of your fault or someone else’s fault driving your vehicle. In a way, it protects you as well. If somebody is injured in a car accident due to your fault, your insurance will cover the cost instead of you paying the lump sum out of your own pocket.
Keep in mind that this cost can range from a few hundred to even a few thousand dollars.
What Does it Cover?
Although you are the one buying the insurance, CTP is basically responsible for providing compensation to the people who have been injured or killed in a vehicular accident. This effectively removes any financial responsibility from the driver and in a way, it protects the driver too. However, keep in mind that CTP insurance only compensates for individuals injured in the accident and not the damaged vehicles or any other goods. You will need to buy another insurance for that.
Why is It Necessary?
CTP insurance is compulsory when you register your vehicle. In some places, CTP insurance is included in your vehicular registration cost. It is necessary because it not only protects the driver from any unnecessary financial strain but also provides a fair compensation to the injured party.
In many cases, if Compulsory Third Party Insurance is not involved, the driver may not be able to pay the compensation cost and the injured party may lose out on the compensation. With CTP insurance, both the parties are protected.
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