Motor Third-Party Insurance and the Motor Vehicles Act
Compulsory cover for harm your vehicle does to others, under sections that changed in 2019.
Motor third-party (TP) insurance pays for the harm your vehicle does to other people: death, bodily injury and damage to their property. Section 146 of the Motor Vehicles Act 1988 says nobody may use a motor vehicle in a public place without it. It protects the victim, not the owner: a pedestrian knocked down in Bengaluru is paid even if the rider who hit him has no money.
The Motor Vehicles (Amendment) Act 2019 replaced the whole insurance chapter (Chapter XI) and the old Chapter X on no-fault liability. Courseware written earlier still quotes section 140 and section 163A, both now gone.
You save ₹300
- Full 100-question mocks
- Chapter-wise practice
- Section-wise sets
One payment, no subscription
What the Compulsory Policy Must Cover (Section 147)
- check_circleLiability for the death of or bodily injury to any person, including the owner of goods or his representative carried in the vehicle.
- check_circleLiability for damage to a third party's property.
- check_circleDeath of or bodily injury to passengers of a transport vehicle, except gratuitous passengers of a goods vehicle.
- check_circle"Third party" includes the Government, the driver and any co-worker on a transport vehicle (s.145(i)). Paid drivers and cleaners are also covered for the employer's liability under employees' compensation law (the Employee's Compensation Act 1923, which the Code on Social Security 2020 repealed and replaced from 21 November 2025).
- check_circleThe premium and the insurer's liability for that premium are prescribed by the Central Government in consultation with IRDAI (s.147(2)). IRDAI does not set TP rates.
Compensation Without Proving Fault
Current sections of the Act, in force since 1 April 2022.
Section 164
When it applies
Death or grievous hurt in any motor accident; the claimant need not prove negligence
Amount
₹5 lakh for death, ₹2.5 lakh for grievous hurt
Paid by
The owner or the authorised insurer
Section 161
When it applies
Hit and run: the vehicle cannot be identified
Amount
₹2 lakh for death, ₹50,000 for grievous hurt, or more if prescribed
Paid by
Under the Central Government's hit and run compensation scheme of 2022
Section 166
When it applies
Full fault-based claim before the Claims Tribunal
Amount
As the Tribunal awards
Paid by
The insurer, on behalf of the insured
| Provision | When it applies | Amount | Paid by |
|---|---|---|---|
| Section 164 | Death or grievous hurt in any motor accident; the claimant need not prove negligence | ₹5 lakh for death, ₹2.5 lakh for grievous hurt | The owner or the authorised insurer |
| Section 161 | Hit and run: the vehicle cannot be identified | ₹2 lakh for death, ₹50,000 for grievous hurt, or more if prescribed | Under the Central Government's hit and run compensation scheme of 2022 |
| Section 166 | Full fault-based claim before the Claims Tribunal | As the Tribunal awards | The insurer, on behalf of the insured |
How a Third-Party Claim Moves
- 1
Accident reported
The police report reaches the Claims Tribunal and the insurer. Under section 149 the insurer designates an officer to settle the claim.
- 2
Settlement offer
The officer can make an offer before the Tribunal within 30 days. If the claimant accepts, it is recorded as a consent settlement and paid within 30 days of that record.
- 3
Or a claim petition
Otherwise the victim or legal heirs apply to the Motor Accidents Claims Tribunal (s.165, s.166). The Act now says an application must be made within six months of the accident.
- 4
One or the other
If a person accepts section 164 compensation through the section 149 procedure, their claim petition before the Tribunal lapses.
Quick practice on risk inspection and hazards. No signup.
Old Figures in the Courseware
Older material teaches no-fault liability under section 140 (₹50,000 for death) and structured-formula claims under section 163A. Section 140 was omitted from 1 April 2022 and section 164 now provides ₹5 lakh and ₹2.5 lakh. The courseware also teaches death and injury liability as unlimited with a cap on property damage; under the amended section 147(2) these limits are prescribed by Central Government rules (the Base Premium and Liability Rules of 2022), so check those for the current position.
How IC-11 Tests This
Expect the section that makes TP compulsory (146), what a TP policy must cover, who counts as a third party, and the no-fault amount. If a question names section 140, it is testing the course text; for anything framed as current law, use section 164. The usual trap is assuming the owner's own injuries are TP: the owner-driver is covered by compulsory personal accident cover, not by TP.
FAQs
What is third-party insurance in motor insurance?expand_more
Compulsory cover under section 146 of the Motor Vehicles Act for your legal liability for death, injury or property damage caused to others by your vehicle in a public place.
What is no-fault liability under the Motor Vehicles Act?expand_more
Under section 164, the owner or insurer pays ₹5 lakh for death and ₹2.5 lakh for grievous hurt without the claimant having to prove negligence. It replaced the old section 140.
How much compensation is paid in a hit and run case?expand_more
Section 161 provides ₹2 lakh for death and ₹50,000 for grievous hurt, or a higher amount if the Central Government prescribes one, paid under the 2022 hit and run compensation scheme.
What is the time limit to file a motor accident claim?expand_more
The amended section 166(3) says the Tribunal will not entertain an application made more than six months after the accident.
Next steps
- Motor Policy Typesarrow_forward
- Motor Claimsarrow_forward
- PLI Act 1991arrow_forward
- Employee's Compensationarrow_forward
Full-length IC-11 practice, timed to 2 hours and scored.