As per the motor vehicles act, third party insurance is compulsory for all vehicle owners. However, it does not cover you or your vehicle. What it does cover is the damage you may have caused to the third party’s vehicle and any injury or death to the third party that may have arisen from you using your vehicle.
Third party insurance benefits the injured third party. You, as a policy holder, will only be the beneficiary of the policy in a nominal sense. So, a third party can claim for compensation by filing a case against you and your insurer.