Third-party insurance for a car is a type of liability insurance that covers the insured against claims from another party. In the case of a car accident, the first party is the insured, the second party is the insurance company, and the third party is the person who files a claim against the insured. Third-party insurance covers damages caused by the insured to others, including physical harm or property damage. It pays for the medical coverage of the driver and passengers in a vehicle and covers the cost of repairs to a vehicle that the insured damages. However, third-party liability insurance does not protect the insured against damage thats not caused by a third-party driver or by drivers who dont have insurance. In most states in the US, third-party insurance is mandatory in some form.