Third-party insurance covers specified legal liability to someone other than the insured and insurer. In motor insurance, it commonly addresses injury or property damage caused to other people, subject to local law and policy terms. It normally does not cover the insured vehicle's own damage.
A Nepalese driver should distinguish legal compliance cover from broader personal financial protection. If the insured car is damaged in an accident, own damage insurance may be needed for that loss. Liability limits, reporting obligations, and settlement authority should be checked before making admissions or agreeing to private compensation.