Third-Party Cover
Motor insurance that pays for injury or property damage you cause to someone else.
Third-party liability cover is mandatory under the Motor Vehicles Act and its premium is set by IRDAI. It pays nothing for damage to your own vehicle — that needs own-damage or comprehensive cover.
Why Third-Party Cover matters when comparing products
Understanding third-party cover is crucial when comparing motor insurance policies in India as it clarifies the minimum legal requirement and the scope of protection. It helps differentiate between basic compliance and comprehensive financial safety nets, influencing budgeting for vehicle ownership and assessing the true cost versus benefit of various insurance options available from different providers.
Illustrative example
If a vehicle with only third-party cover causes an accident damaging another car by ₹50,000 and injuring its driver, the policy would pay the ₹50,000 for the other car and medical expenses for the injured driver. However, repairs to the policyholder's own damaged vehicle would not be covered, requiring them to pay from their pocket.