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As insurance is a contract, where the insurer and the insured

are the two parties involved, this liability can be to any other

person, or in other words, to any ‘third party’ to the

contract. Hence, such liabilities are generally called ‘third-

party liabilities’. Driving a motor vehicle without third-party

insurance in a public place is a punishable offence in terms of

the Motor Vehicles Act, 1988. A motor third party insurance

policy is mandatory according to Motor Vehicles Act, 1988.

Motor insurance is of two main types:

- Comprehensive (own damage – OD – and third party – TP

both covered)

- Third Party - (own damage – OD – not covered; Only third

party – TP covered)

5. Travel insurance

Travel insurance is called by different names by insurance

companies, but offers insurance protection while one travels;

people usually opt for it when traveling out of the country,

but may even be bought for domestic travel. Travel insurance

protects the insured person and his family from domestic and

international travel related perils and losses like accidents,

unexpected medical expenditure during travel, baggage loss,

interruption or delays in flights etc.

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