What is motor third-party insurance in simple terms and who benefits from this motor insurance coverage?

Motor third party insurance was introduced by the Motor Vehicle Insurance (Third Party Risks) Act in 1989. The Act provides for compulsory insurance against third party bodily risks in respect of the use of vehicles.

It is mandatory that any vehicle, van or motorcycle for private or commercial use should have Motor Third Party insurance cover. The law only exempts Government owned vehicles.

The person who benefits from Motor Third Party is a third party who suffers loss or death or bodily injury as a result of an accident. This maybe any road user, such as a pedestrian, a motor vehicle passenger, a property owner involved in an accident.

The first party is the owner of the vehicle or motorcycle whereas the insurance company is the second party.

Please note that this type of insurance protects the interest of only third parties, not yours.