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In India, car insurance is mandated by the Motor Vehicles Act, 1998. Any four-wheeler the plying on Indian roads should have a valid motor insurance policy that provides at least a minimum cover of third-party liability. As indicated above, third-party liability refers to the damages caused by the car owner (while using the insured car) to other people or their property.So, if a vehicle on the road incurs damage in an accident caused by your car, you need not pay the expenses from your pocket. Instead, a valid motor insurance plan equips you with the ability to raise a claim with your insurance company. If the damage is covered under your plan and there is no indication of fraud, the insurer will pay for the damages.