Third-party cover is the part of a motor policy that pays for the injury, death or damage you cause to other people. It is compulsory under section 146 of the Motor Vehicles Act, 1988, it is the cheapest component of a motor policy, and it is the one piece of cover a road user cannot choose to be without. It is also missing on a very large share of vehicles: the Supreme Court noted on August 4, 2026 that nearly 56 percent of vehicles plying on Indian roads are uninsured, which works out to 16.54 crore vehicles out of about 30.48 crore, and distributors put the uninsured share in the two-wheeler segment at close to 60 percent.

Method and data basis

Built from section 146 of the Motor Vehicles Act, 1988, the standard structure of a motor liability-only and package policy as ordinarily issued in India, and the Supreme Court's directions of August 4, 2026, which cited the Standing Committee on Finance report of December 2024 for the 16.54 crore figure. The uninsured percentage for two-wheelers is an industry estimate quoted in reporting of September 25 and 28, 2026, not an official count. Your policy wording and the Act govern over this summary.

What third-party cover pays

  • Death and permanent disability of other people arising from an accident involving your vehicle, at the levels set by law for the vehicle class.
  • Injury to other road users, including pillion riders and occupants of the other vehicle.
  • Damage to other people's property, subject to the statutory limit.
  • It does not pay for your own vehicle or your own injuries. That is own damage and personal accident cover, which are separate parts of a package policy.

What happens when the rider who hit you has no insurance

The absence of a policy does not end your claim, it changes who you collect from. Instead of a claim against an insurer with deep pockets and a settlement process, you have a claim against the individual owner or driver personally, decided by the Motor Accident Claims Tribunal on the same principles of liability and compensation. Proving the accident is unchanged. Collecting the award is the harder part, because it depends on the other party's assets and willingness to pay, which is exactly why mandatory cover exists: it converts an uncertain recovery into a guaranteed one. The Court's August 4 directions also point the other way, with IRDAI and the road transport ministry told to evolve a pilot linking fuel supply to insurance status, using automated number plate recognition against insurance and vehicle databases, and a first version is being tested in Madhya Pradesh.

Implication

Two consequences follow for you. If you ride uninsured, you are not saving a small premium, you are accepting unlimited personal liability for whatever you cause, plus the risk of being stopped, having the vehicle detained, and being refused fuel under a pilot that is expanding. If you are hit by an uninsured rider, you should still file the claim: register the accident, get the medical record, keep the police intimation, and pursue the owner through the tribunal. The Court also raised the minimum period for which third-party cover must be bought at registration, to four years for new cars and six years for new two-wheelers, which raises the upfront cost of a new vehicle and removes the option of a one-year experiment.

Action

Before you buy a used vehicle, check the insurance, not only the machine: ask for the policy, confirm the vehicle identification number on it matches, and check whether it is transferable and in force. After an accident, photograph the other vehicle's registration number first, because a number that leads to an insured vehicle leads to a solvent defendant, and one that does not leads to a personal claim. If you ride yourself, treat the TP premium as the non-negotiable part of ownership and review the own damage component separately, since IDV decides that piece.

Watch item: the outcome of the fuel-link pilot. If number plate scanning reaches highway fuel stations at scale, enforcement of section 146 changes from intermittent to continuous, and the economics of riding uninsured change with it.