Why is it important to have a third-party cover in your motor insurance? MintGenie explains

livemint.com:

Official estimates suggest there are over 30 crore registered motor vehicles in India, but only around 50 per cent of them are insured. This is despite the fact that having insurance, at least a third-party liability cover, is mandatory as per the Motor Vehicles Act in India.

Though it is a well-known fact that motor insurance is one of the best ways to avoid financial strain in the wake of an accident, or any other unforeseen incidents, the penetration still continues to be very low in India. This is primarily because of a low level of awareness of the benefits of insurance. While customers tend to buy insurance when they buy a new vehicle to ensure compliance and also renew it for the next couple of years, however, they do not feel the need or urge to renew it subsequently. 

However, motor insurance should be one of the key boxes to be ticked in the checklist of a person owning a vehicle. Let us see why having motor insurance is important.

Firstly, as already mentioned, as per the Motor Vehicles Act, 1988, it is mandatory for all vehicles in India to have at least a third-party insurance, which essentially covers any damages caused to a third party in case of an accident caused by your car.

So why is third-party insurance important? As data suggests, road accidents have been on the rise in India and in case of a car accident causing an injury to a third person, the ensuing hospital treatment could prove to be costly. If a customer has a third-party cover, then the insurance company pays for the treatment thereby absolving the car owner or the driver driving the vehicle from any financial obligation in terms of paying for the treatment. 

Moreover, since it is mandatory by law, driving without an insurance or with an