Motor insurance is a coverage which is bought for cars, trucks and other vehicles that play on roads.Its main objective to give complete protection against physical damage or loss from natural and man-made calamities.Motor Insurance is mandatory to play a vehicle on road.
Under the Motor Vehicles Act, third-party insurance is a statutory requirement . It is referred to as a ‘third-party’ cover since the beneficiary of the policy is someone other than the two parties involved in the contract i.e. the insured and the insurance company. The policy covers the insured’s legal liability for death/disability of third party loss or damage to third party property. The victim can claim for compensation under ‘no fault liability’ or ‘fault liability’ of the Motor Vehicles Act 1988. However, unlimited compensation is available only for bodily injury or loss of life. In case of damage to a property, the insurer’s liability is limited .
Mandatory by law, Third party cover protects against the legal liability of accidents. It also covers damage caused to any surrounding property.
- Third party insurance policy :It covers third person who has been injured in an accident involving you and your car.The policy does not provide any direct benefit to the insured.
- Comprehensive insurance cover :This cover is an add on to the third party insurance plan and protects the owner from
financial losses caused by damage or theft of the insured vehicle.Besides insuring vehicles, it also provides third party coverage.
It’s very important to remember that this type of insurance doesn’t cover the costs of damage to your own car.