What is the Nature and Extent of Coverage Offered Under Third-Party Insurance?

The most basic cover provided by any kind of motor insurance policy including 2 wheeler vehicle plans is third-party liability cover, also referred to as the “act only” cover. Deemed as a statutory requirement under the Motor Vehicles Act 1988, the beneficiary of the policy is the party involved in the accident other than the insured. Though the contract of the policy is drawn between the insurer and the insured, the insured policyholders do not benefit anything from the policy in case they have opted only for a third-party liability cover. However, the policy covers the insured’s liability of compensating the third party for death or damage that may have been caused due to the accident.