Motor Insurance means insuring the financial risk involved while operating the car. The car might meet with any damages, accident or may be lost or stolen. In such a situation the losses borne by the owner may be compensated by the Insurance Company if the same is covered under Motor Insurance Policy.

Under the provisions of Motor Vehicles Act all the vehicles, which are operating in public places, should have Car insurance policy at least to cover Third Party liability. It means that the Car Insurance Policy must cover the Third Party in case of any accident. It may or may not cover the damages of the owner of the car!

Thus, in India it is definitely mandatory to have a car insurance policy to cover Third Party liability. Thus, in case of a damage or accident the owner’s car would not be covered but the third person’s damages would definitely be paid for!

Does it make sense to have this kind of an insurance policy where the owner’s damages are not covered? Obviously not. Hence even though only Third Party Insurance is mandatory in India, it makes most sense when a comprehensive insurance plan has been taken to cover up the owner’s damages along with the third parties in case of an accident or damage.