New Delhi, Feb. 9 -- Many drivers buy insurance mainly to stay legally compliant, but the role of liability coverage is often underestimated until an actual accident happens. If drivers have ever explored third-party car insurance online, they have probably noticed it is the most basic and affordable form of cover available. What it lacks in coverage for self, however, it makes up for in legal and financial protection when the policyholder is responsible for damage or injury to others on the road.

Every registered vehicle must have at least a basic car insurance policy that covers third-party liability. This requirement exists because accidents can lead to consequences like medical treatment, property repair and even legal claims. Third-...