A Three point starter is used to start dc shunt motor or dc compound motor.
To understand this we need to realize that high current will flow in dc motors at the time of starting, as the speed is zero and the back emf is zero and thus current is enormously high, which may burn the armature conductors.
To start a dc motor using this starter, first the dc supply is switched on and the starter handle is moved to position 1. Note that, the handle itself is a conductor. So the motor starts rotating slowly and back emf is generated. Now it is gradually moved along the studs to ultimately reach run position. The Hold Coil which carries the field current is energised by the time and can hold the soft iron magnet attached to the starter handle. So we can release the handle there and it will stay there. Thus the series resistance is gradually cut off from the armature circuit and the motor runs at full voltage.
It also provides protection against,
Overload: There is an Overload Release Coil in this starter, which is designed in such a way that if motor armature current is above safe (full load) value its magnetic field is high enough to attract the iron piece M, which in turn short circuits the points b and a. As a result, the HC is bypassed and de-energised and it releases the starter handle and motor is disconnected from supply.
No voltage: If during operation, the supply voltage is suddenly cut off, the HC is de-energised and it releases the starter handle. So that once the supply is available again, full supply voltage is not applied to the standstill motor.
But there is a disadvantage with 3 point starter. The problem is if we try to increase the motor speed using field weakening method, then there will be false de-magnetization of Hold Coil. Because when we intend to increase the speed, we decrease field current. As a result, magnetic field of HC decreases and starter handle is released causing motor to stop. To overcome the problem, we use 4 point starter.